etru

Payments

II pillar payments

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the 2nd pillar?

video-still-karisma

Pension agreement: when more than 50 times the national pension rate has been accumulated.

The main option of withdrawing the money accumulated in the 2nd pillar fund is to conclude a pension agreement. This means that upon retirement you conclude an agreement with a life insurance company, handing the funds accumulated in the pension fund over to the disposal of the company. In return, the insurance company will pay you a regular pension, and will do so for the rest of your life. This is important to know, as insurance companies estimate the duration of the retirement age, taking it as the basis when calculating the size of the payments made. When you lead a healthy life and live to an old age, the insurance company pays you more than you have accumulated in your fund. Otherwise, the insurance company keeps some of the money and uses it to make payments to clients who live to an older age.

Funded pension: when up to 50 times the national pension rate has been accumulated

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application has to be filed in either a bank office or in the Internet Bank. In the application, include how often and for how long you want to receive the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

In a lump sum: when up to 10 times the national pension rate has been accumulated.

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

The assets of the pension fund can be bequeathed. The heirs can choose whether to withdraw the money at once or to inherit fund units. An income tax of 20% applies to the cash payments.

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

III pillar payments

Pension agreement

The state does not tax payments from the 3rd pension pillar if you have concluded an insurance contract under which regular pension payments will be made to you for the rest of your life.

Resale of shares

Fund shares can always be sold and in this case, income tax applies. After turning 55, but not before five years have passed from the initial investment, disbursements are taxed a rate of 10%.

The 3rd pillar savings can also be bequeathed

The heir can then decide what to do with the inherited assets—whether to transfer them to their account or to withdraw the amount in cash.
Income tax of 20% applies to cash withdrawals.

Do not hesitate to ask questions.

Together we will find the right solution.

Reet Roos

pension consultant

Mon–Fri 8–17

680 2743
Sign up for a consultation