Do you know how much
pension you will receive
in the future?
LHV pension app
gives you an overview.

The calculator enables one to get an estimation of the size of pension payments. Payments are displayed by three pension pillars.

1st pillar forecast is based on:

• the information entered by the user on the length of employment, number of children, public service and other pensionable years and the amount of insurance shares;
• every year nationally updated rates (base amount, value of a year of pensionable service).
• By default, the gross salary is calculated based on the data obtained from AS Pensionikeskus: first, the receipts for January, May and September are eliminated from the receipts of the user for the last 12 months (as these are the months when the applications for switching the units enter into force and the receipts may accordingly be bigger than usual). From the remaining months, the receipts for the last six months are taken into account, out of which once again the biggest and the smallest value are eliminated. The gross salary displayed by default is the salary calculated on the basis of the average receipt for the remaining four months. Upon request, the user can change the amount of gross salary used in the calculator.

The basis for the 2nd and 3rd pillar estimated payment is:

• information obtained from AS Pensionikeskus on the user’s 2nd and 3rd pillar contributions and the value of accumulated shares;
• user-entered estimation of funds’ return and the number of years spent in retirement.

Inputs

• The calculator finds the user’s date of birth based on the user’s personal ID code. Based on the age, the calculator shall calculate the official date of retirement, considering the overall pension age as 65 years.
• The user can bring the retirement age forward by 3 years starting from the date of retirement, or defer it. In this case, the calculator shall calculate either the early retirement pension or deferred old-age pension.
• If the user chooses that based on the State Pension Insurance Act, he/she has a right to old-age pension under favourable conditions, the restriction concerning the years of retiring before the term will disappear.
• The user enters the year of commencing work, which can be a minimum of the user’s year of birth + 18.
• The gross salary calculated based on monthly receipts is generated on the basis of data obtained from AS Pensionikeskus, however upon request the user can change the size of gross salary used by the calculator.
• For every child born before 1 January 2013, the calculator adds a pension supplement of two years of pensionable service. At the same time, it must be kept in mind that the pension supplement is paid to one parent only.
• For every child born starting from 1 January 2013, the calculator adds a pension supplement of three years of pensionable service. However only in the case that the user HAS NOT joined the 2nd pillar. At the same time, it must be kept in mind that the pension supplement is paid to one parent only.
• The user enters the years of public service. Pursuant to the Civil Service Act, it affects the size of the 1st pillar pension starting from year 10.
• The user enters the estimated average annual rate of return for 2nd and 3rd pillar funds. The rate of return of funds may be positive as well as negative. You can view the rates of return of funds at https://www.lhv.ee/et/pension#vordle or on the homepage of the Pension Centre. By using a comparison, it is possible to also examine the result in the case of the long-term average annual rate of return of Estonian pension funds. In this case one should still remember that the return of previous periods does not guarantee future performance
• The user enters other pension eligible years, which the user acquired until the year 1998 (years in Defence Forces, time of study at a vocational educational institution or institution of higher education, being unemployed caring for a child under 3 years of age, the time during which a person receives unemployment benefit or participates in labour market training, other supplementary years included under favourable conditions).
• The user enters the estimated number of years to be spent in retirement (according to Statistics Estonia, a person retiring at the age of 65 can be in retirement for 18 years on average).
• The user enters the amount of insurance shares, which can be found at www.eesti.ee => Support and Social Assistance => Pension insurance register notice.

Constants

• State pension growth, 3%, based on the forecast of the Ministry of Finance;
• Salary growth, 4% based on the forecast of the Ministry of Finance;
• Contributions into the 2nd pillar pension fund, 6% of gross salary;
• 1st pillar base amount 191.6496 (as at 01.04.2019);
• 1st pillar value of a year of pensionable service 6.627 (as at 01.04.2019);
• National pension rate 205.21 (as at 01.04.2019);
• Average amount of the pension insurance part of individually registered social tax 3,114.92 (as at 01.04.2019);
• Social tax rate, basic exemption, income tax rate, unemployment insurance rate based on regulations currently in effect.

Results

• The size of monthly payment under the 1st pillar pension is composed of three parts: base amount, pensionable service, insurance part. The base amount is fixed by the state and is changed annually. The parts of pensionable service and insurance are calculated by the calculator pursuant to the data entered by the user. Final amount is increased or decreased based on the user-entered data.
• The calculator calculates the amount accumulated in the 2nd pillar by using the formula:
  S_0 = amount accumulated for today,
  S_n = S_(n-1) × (1+yield)^(1/12) + contribution × gross salary × (1+salary increase)^(n/12),
  where n = months to retirement (n = 1, 2, 3, …).
• The calculator calculates the amount accumulated in the 3rd pillar by using the formula:
  S_0 = amount accumulated for today,
  S_n = S_(n-1) × (1+yield)^(1/12) + contribution × (1+salary increase)^(n/12),
  where n = months to retirement (n = 1, 2, 3, …).
• The calculator calculates monthly payment under the 2nd and 3rd pillar pursuant to the user’s estimate about the years spent in retirement.
• Estimated pension = 1st pillar pension + 2nd pillar pension + 3rd pillar pension

The pension calculator's calculations are based on the data entered into the calculator by the user. The rates of return of the entered pension funds and other investments, the growth of salary and pension fluctuate over time and their value may rise or fall. It must be taken into consideration that higher rates of return are accompanied by greater risks and a previous rate of return is not a guarantee of the same rate of return in the future. The pension amount found with the help of the calculator is, above all, a forecast, and may differ from the actual pension received. When calculating your future pension, the calculator relies on applicable regulations, including the State Pension Insurance Act and the Funded Pensions Act, which may change over time. The results provided by the calculator are illustrative and should not be treated as an investment recommendation. Before making a specific investment, including into the 2nd or 3rd pension pillar, you should review the prospectus for the specific fund and consult with a specialist.