The Estonian pension system consists of three "pillars": The state pension (first pillar), a second pillar consisting of employer-employee contributions, while the third pillar is any voluntary private pension scheme savers might sign up to.

The Bank of Estonia reported fund assets totaled €8.6 billion, growing 2 percent (€192 million) in Q3 2024 , compared with the previous quarter, and by 19 percent (€1.37 billion) over the year.

Third pillar pension funds saw the largest growth, up 5 percent (€38 million) quarterly and 48 percent (€254 million) annually, with contributions exceeding payouts by €74 million in Q3 2024, the Bank of Estonia said.

According to the central bank, in Q3 2024, second pillar funds totaled €5.6 billion, with asset growth of 2 percent (€112 million) in and 21 percent (€997 million) over the year, as contributions exceeded payouts by €32 million in Q3 2024 and €349 million annually.

The average quarterly nominal return was 16.5 percent, the highest in three years, while index funds comprised 26 percent of assets, and investment in Estonia dropped to 12 percent.

The Bank of Estonia reported third pillar pension funds had assets totaling €783 million, growing by 5 percent (€38 million) in the third quarter and 48 percent (€254 million) over the year, with contributions exceeding payouts by €26 million in Q3 2024 and €143 million annually.

The average annual nominal return was 20.2 percent. Index funds, representing 53 percent of assets, grew 7 percent in Q3 and 74 percent over the year, while investment in Estonia declined to 5 percent, according to the bank.

Public and non-public investment funds totaled €2.18 billion, growing by 2 percent (€42 million) in Q3 and 6 percent (€121 million) over the year, with non-public funds comprising 78 percent of all investment funds.

Contributions exceeded payouts by €15 million in the third quarter.

The Bank of Estonia said it will release Q4 2024 fund statistics on 10 February, 2025.

The Estonian pension system comprises three "pillars." The first pillar consists of the state pension, funded through social tax contributions, providing a basic income for retirees based on years worked and previous contributions.

The second pillar is a formerly mandatory, now optional, privately-managed funded pension system in which employees contribute a portion of their salary, supplemented by a state contribution.

The third pillar consists of any voluntary private pension scheme which people may join to make additional contributions to their retirement savings. It carries with it certain tax incentives, more flexibility and the potential for higher returns.

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