Almost 102,000 applications to withdraw from pension fund second pillar

Euros (photo is illustrative).
Euros (photo is illustrative). Source: (Marco Verch/Wikimedia Commons)

A total of 101,882 people in Estonia had filed an application by February 25 to withdraw their savings from a mandatory pension fund, dubbed the second pillar of the pension system, Postimees reports, citing data from the Estonian Funded Pension Registry.

The applications had been filed by 53,020 women and 48,862 men.

The average age of the people who had filed an application was 39 years, which means that apparently the average person who is leaving joined the second pillar at the time when it was launched in 2002.

When money is withdrawn from the second pillar, an income tax of 20 percent on the amount withdrawn must be paid.

In February, the numbers of new applications filed had however decreased on the previous month.

A total of 33,000 applications to quit the second pillar were filed during the first week after applications started to be accepted at the beginning of January, and slightly over 75,000 during the month of January.

It has been estimated, however, that the pace at which applications are filed will speed up again before the end of March, when the first period of application is set to end. To those who have filed their application by the end of March money will be paid out in September.

The periods for filing applications to withdraw money from the second pillar are from January 1 to March 31, from April 1 to July 31, and from August 1 to November 30. For each of these periods, the deadline for paying out the money stands at five months after the end of the application period.

The entire amount accumulated into a person's second pension pillar will be paid out and an income tax of 20 percent has to be paid on the sum. The exact amount to be paid out to the individual depends on the price at which the fund manager can sell the pension fund units, which in its turn depends on developments in the financial markets.


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Editor: Roberta Vaino

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