Largest second pillar payout was over €440,000

Estonia’s gross domestic product (GDP) rose 4.3 percent to €8 billion in the first quarter of 2022
Estonia’s gross domestic product (GDP) rose 4.3 percent to €8 billion in the first quarter of 2022 Source: Emilian Robert Vicol / Pixabay

The largest payout made to people that quit the second pillar pension system last week was more than €440,000 and the smallest payout was less than one euro.

Funded Pension Registry (Pensionkeskus) board member Kristi Sisa told ETV's morning show "Terevisioon" that after deducting income taxes, a total of more than €1 billion was transferred to peoples' accounts last week with the state receiving €265 million euros in income tax.

"The smallest amount was less than one euro and the largest sum was more than €440,000. The average payout was €7,200," Sisa said, explaining that 98 percent of the payouts were internal payments, which move fast and reach peoples' accounts fast.

"If we take the pre-tax amount of €1.3 billion as the basis, then the most was paid out from Swedbank's funds with more than €600 million, 45 percent of the total volume. LHV and SEB came next," Sisa noted.

She added that the people who quit the second pillar system were mostly middle-aged and there were more women than expected. Sisa added that people were surprised to see such large sums hit their bank accounts.

"The markets have gone up and we have gotten multiple calls, where people were wondering how they got that much money. They asked if the income tax was not taken off, but it actually was," she said.

Sisa noted that the momentum of leaving the second pillar has slowed now. "The Ministry of Finance makes more specific forecasts, but it seems the momentum has stopped some. People are not leaving at the rates they were in the second period, which was from April to July," the pension system manager said.

Kristi Sisa. Autor/allikas: ERR


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Editor: Kristjan Kallaste

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