Second pension pillar leavers to possibly receive disbursements on Tuesday
The Pension Center (Pensioonikeskus) started transferring money to the people leaving the so-called second pillar of the national pension system, and most of the 12,236 leavers should be seeing the money hit their accounts today. In total, €94.6 million is being disbursed.
"We're starting with the disbursements today," a board member of the Pension Center Kristi Sisa said. The center is planning to finish with the payments today, but when will the payments arrive, depends on the banks.
In the case of Estonian banks, the disbursements should arrive on the accounts on the same day, Sisa said.
While the Pension Center is paying €94.6 million in total, which is €7,731 per leaver, it doesn't mean the same sum will be credited to the accounts. The income tax will be deducted from it, which is mostly 20 percent.
The submission of applications for disbursements in the second round ended in July. As of now, the deadline for making payments in the third round has also expired. While in the first round 149, 260 people submitted the application, 12,236 did so in the second round and 23,340 in the third round.
How many will actually receive the disbursement in May is not certain yet, because the applications can be taken back until the end of March. The Pension Center wasn't able say what is the sum of the disbursements of the third round because the sum isn't constantly monitored.
The fourth round of acceptance of applications for leaving the second pension pillar started in December. To date, 985 applications have been submitted for disbursement in September.
After a total of three locked rounds, 184,836 people have decided to leave the second pension pillar. A total of 788,321 people have joined the second pillar in Estonia.
About a fifth of pension funds was withdrawn last year, most of them last September with €1.32 billion disbursed.
It's possible to leave the second pillar of the pension system, referring to employer/employee contributions, at three set times a year, by submitting an application within the given deadlines. It is also possible to cancel the application up to one month before the payment is made.
Membership of the second pillar had been mandatory for most wage earners since 2010 but this was liberalized by the coalition of the Center Party, EKRE and Isamaa - and was in fact a policy from the last of these parties. Following the applications and payments, Estonian private consumption made a significant jump last autumn as a result.
The first pillar refers to the state pension; the third, to optional, private sector pension schemes.
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Editor: Roberta Vaino