17 percent of people apply to leave second pillar pension fund

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The second pillar refers to employer/employee pension contributions, and membership will be voluntary from next year. Source: Priit Mürk/ERR

Data from the Pension Center shows 129,681 people have submitted an application to leave the second pension pillar after changes were introduced at the start of the year. This is 16.9 percent of people who joined.

To receive money from the second pillar in September, applications must be submitted by the end of March. Applications can also be withdrawn until July.

The Ministry of Finance has estimated that about 25-30 percent of the participants, or about 200,000 people, may leave the second pillar.

At the beginning of March, the average age of those leaving the second pillar was 39, now it has risen to 41. Of those, 52 percent of those are women and 48 percent are men.

Of the applications for leaving the second pillar, 73 percent have been submitted in Estonian and 27 percent in Russian. 317 applications have been submitted in English.

People who have submitted the application by the end of March will receive the money in September. If the application is submitted after April 1, the money will be received in the next period, which is in January 2022.

A person leaving the second pillar is paid all the money at once with an income tax rate of 20 percent.

The exact amount to be credited depends on the price at which the fund manager sells the pension fund units, which depends on the financial markets. There is also a charge for applying to withdraw money, and fees may vary by bank.

Withdrawals also stop further contributions to the second pillar. You can rejoin the second pillar in 10 years, and you can withdraw your funded pension up to twice during your lifetime.

Those who want to suspend second pillar payments but plan to continue investing in a pension investment account must first open a pension investment account with the bank, then apply to transfer new contributions or money collected to the pension fund to the pension investment account. Applications can be submitted in April.

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Editor: Roberta Vaino

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