II pillar funds

The II pillar is your personal reserve of funds, helping you to ensure a more carefree retirement.

In the pension fund, your funds are invested. This gives you the chance to grow your money for retirement.

You can automatically contribute to the II pillar by making monthly contributions from your gross salary.

You decide whether to contribute 6%, 4% or 2% of your monthly salary, with the state adding an extra 4%.

The monthly payment to the II pillar is only a small part of your salary, but if you save over the years, it provides a significant reserve.

You can keep an eye on your pension savings via the Internet bank. If you feel you could do with more for a pleasant retirement, you may decide to contribute to the III pillar. You can make contributions at a time and in an amount that suits you best.

There are several reasons why it is beneficial to build up a pension in Swedbank.

• You can choose a fund with low fees. This way, you accumulate more money.
• Excellent return. The rates of return of our pension funds have consistently been among the best in Estonia. You can track the return of the pension funds on the website of the Estonian Funded Pension Registry.
• You can easily find the fund that suits you best by your year of birth, and you can accumulate in the same fund until you retire, as the fund’s risk level changes over time.
• Your pension is looked after by experts in their field.

When investing for retirement, it is important to be in a fund with the right risk level for your age. You can risk more when you still have a long time to save, but as you approach retirement age it makes sense to reduce the level of risk to preserve the value of the money you have saved.

Life-cycle funds

In unique life-cycle funds, the proportion of shares and the associated risk level changes automatically over time with your age.

• You can save in the one fund that is right for you until retirement.
• There is no need to switch funds at any point.

Index fund

Suitable for you if you are at least 10 years away from retirement and are willing to take a higher risk to build up your pension savings.

• Lower fees. This way, you accumulate more.
• The value of a fund unit can fluctuate significantly in the short term, as up to 100% of the fund’s assets are invested in equity risk instruments.
• The level of risk does not change over time, and it makes sense to switch funds as retirement approaches.

1. Find a suitable fund on this page.
2. Submit the application in the Internet Bank to direct monthly contributions and transfer already accumulated pension assets to suitable fund.
3. Contributions to the selected fund will start the following month.
4. Pension assets accumulated are transferred three times a year.

   When you submit an application to transfer previously collected assets to new fund between:

   • 1. August – 30. November, exchange takes place on the first working day of January;
   • 1. December – 31. March, exchange takes place on the first working day of May;
   • 1. April – 31. July, exchange takes place on the first working day of September.

1. Find a suitable fund on this page.
2. Go to the Internet Bank you prefer, find the II pillar page and the place where you can switch your pension fund.
3. By switching funds, you can choose among all of the II pillar funds in Estonia. Locate suitable Swedbank fund and select it. We also recommend to transfer the already accumulated pension assets.
4. Contributions to the selected fund will start the following month.
5. Pension assets accumulated are transferred three times a year.

   When you submit an application to transfer previously collected assets to new fund between:

   • 1. August – 30. November, exchange takes place on the first working day of January;
   • 1. December – 31. March, exchange takes place on the first working day of May;
   • 1. April – 31. July, exchange takes place on the first working day of September.

1. Follow your values by choosing a pension provider with sustainability ambitions. As of 31.03.2024 Swedbank pension funds have invested:
   • 499 million euros to funds that follow environmental, social and governance principles (ESG aspects);
   • 1304 million euros in stock and bond baskets filtered with ESG aspects;
   • 115 million euros in ESG-themed stock baskets (e.g. electric cars, cyber security).
2. Sustainable pension funds exclude damaging industries. Swedbank has a “blacklist” for companies in which we don’t invest. Read about our Responsible Investment Policy here.
3. You can always check if your pension provider is paying attention to sustainable investments. The average ESG rating of our pension funds is A (source: MSCI).

We asked pension savers how they would allocate 1000 euros for sustainable investment. Here are their answers.

When you retire you have three options to start using your money.

• Regular payouts, i.e. fund pension. If you set a period for payouts, which corresponds to your life expectancy, then you are able to use the money with a 0% income tax rate. For a shorter period, the income tax is 10%.
• One-off payout (can also be partial), on the amount of which you have to pay 10% income tax.
• Whole life insurance contract or insurance for a specified term.

You will already be able to withdraw money on more favourable terms 5 years before retirement. In case of no work ability, you can withdraw money tax-free.

If necessary, you can opt out of the II pillar and withdraw the accumulated amount before retirement age. Financially, this is a harmful decision for you.

The assets you accumulate in your II pillar are fully inheritable.

It is up to the heirs to choose whether to withdraw the accumulated money or to inherit the fund units, which will be transferred to their pension accounts. These options can also be combined: to withdraw part of the money and transfer part of the fund units to a pension account.

If the heirs decide to withdraw the money that has been saved, they will have to pay income tax on the amount.

Legal heirs can apply for the redemption of inherited investment units.