Pensionikeskus starts making second pillar fund payouts

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Money (photo is illustrative). Source: Emilian Robert Vicol / Pixabay

Pension system manager Pensionikeskus on Thursday started making payouts to persons who submitted an application to exit the second pension pillar in the first round, meaning no later than on March 31 this year.

Payouts will be executed in random order during the month of September, they do not depend on the alphabet or the time of application, Pensionikeskus said.

All the money accumulated in the second pillar will be paid out. The exact amount that will be paid out depends on the price of the fund units when they are cashed in, so the actual amount paid out may be different from the amount that was in the person's pension account when the application to withdraw was submitted. 

If a person withdraws their second pillar savings before reaching retirement age, an income tax of 20 percent is automatically deducted from the payment. When the whole amount is withdrawn in retirement age, income tax of 10 percent must be paid.

Pensionikeskus will not send a separate notification about the transfer of the second pillar funds. 

Compensation for the payments temporarily suspended by the state to those who submitted an application for withdrawal of funds will be carried out as a separate disbursement in September, after the payout of the principal amount.

Applications to exit the second pillar can be submitted round the year, and application cycles recur from year to year. An application for withdrawal of funds can be canceled up to one month before the application enters into force.

Applications submitted between January and March 2021 can no longer be canceled. 

The second pillar refers to employer and employee pension contributions. Membership of the pillar has changed from being mandatory to voluntary.

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Editor: Helen Wright

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