In accordance with the Funded Pensions Act, mandatory funded pension payments can be obtained upon reaching the old-age pension age. Note: Old-age pensions under favourable conditions, early retirement pensions and other such pensions do not entitle you to receive mandatory funded pension payments.
The manner of payment depends on how many national pension rates* equals the value of the units in the pension account. The Estonian Central Register of Securities makes payments (except in the case of an insurance contract) from the 16th-20th of the month determined by the frequency of payments.
There are three ways of receiving mandatory funded pension payments:
- Single payment. If the total value of units in the pension account is less than 10 x the national pension rate, the person may receive it in a single payment. It may be possible to enter into a pension contract instead, but the insurance company may refuse to enter into one.
- Funded pension. If the total value of the units is 10-50 x the national pension rate, the money can be received in regular payments directly from the pension fund. It may be possible to enter into a pension contract instead, but the insurance company may refuse to enter into one.
- Pension contract. If the total value of the units exceeds 50 x the national pension rate, the person must enter into a pension contract with an insurance company which will then calculate the amount payable to the person until the end of his or her lifetime, using the annuity calculation formula. If the total value of the units exceeds 700 x the national pension rate, there are several possibilities: the pension contract may be entered into for the total value of the units, or the units that exceed 700 x the national pension rate may be left in the pension account and it is possible to take out a funded pension to receive payments on those units, take the exceeding amount out as a single payment or enter into another pension contract.
Applications for receiving payments (single payment or funded pension) may be submitted at a branch or online at www.pensionikeskus.ee in the web section (as of 1 January 2017).
You have to contact an insurance company in order to enter into a pension contract.
If you continue working and submit an application to receive payments, the calculation of payments from your gross salary to the mandatory funded pension shall be terminated on 31 December of the year the first redemption of units was made.
You can obtain further information about your pension assets and options for receiving payments by calling our investment support on 6 131 606.
*The national pension rate is the amount calculated on the basis of an index approved annually by the government, which is used for calculating pensions for people not entitled to receive the state old-age pension. The national pension rate established for 2017 is €175.94. This rate is effective until 31 March 2018, after which a new national pension rate will be established.