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More about the II pillar

Low-fee funds help your pension grow faster

  • Fees of all our pension funds are favourable.
  • We make sure you save in a fund matching your age. With the right fund, your pension can grow sufficiently, and as the retirement age gets closer, the risks will be lower.
  • Most Estonians save for their pension with us.
  • When investing, we keep in mind the principles of sustainability.
  • New! See the benefits that pension reform brings to the collector.

Important to know about the II pillar pension:

  1. Money is accrued in the II pillar applying an efficient 2 + 4 scheme: the state adds two euros to each of your euros.
  2. Every month, your employer pays 33% social tax on your salary. Of this, 13% will be used for health insurance and 20% to pay the state pension provided to today’s pensioners (I pillar).
  3. If you join the II pension pillar, 20% will go to today’s pensioners, but 16% will be transferred directly to your personal pension account. To this, 2% is added of your gross salary every month. This is how your personal pension pillar is accumulated – you can use this in addition to the state pension when you retire.
  4. The pension is automatically added to the II pillar in the form of monthly payments and based on your remuneration.
  5. Find a suitable fund to save in the II pillar.
    • Higher risk funds (K1990–1999, K100, K60) with more equity investments. There may be greater fluctuations with regard to equity investments, making them ideal for young savers, whose saving period is long and temporary fluctuations do not affect the saver. This way you can earn higher returns.
    • Lower risk funds (K10, K30) with more bonds. Bond investments are generally more stable and have lower risk. These are more suitable for an elderly saver to preserve the pension assets accumulated before retirement.
  6. If you save in funds actively managed by Swedbank (K100, K60, K30, K10), we will notify you in the future when it is time to change the fund. When collecting in a life-cycle fund, you do not have to change the fund yourself, as its risk profile automatically becomes more conservative over time. So you can collect in one fund throughout the collection period.
  7. In addition to yield, always pay attention to administrative fees. Fees for Swedbank pension funds are some of the most favourable in Estonia.

It serves to keep in mind that the 1st and 2nd pillar pension may not be enough as they usually constitute about 40% of the salary before retirement. A good opportunity to increase your savings is to use the 3rd pension pillar with an income tax rebate.

From 2021, it will be possible for those Estonian tax residents who were born before 1983 to voluntarily join the II pillar.

Upon reaching the age of majority, the young person is automatically added to the II pillar pension system. To this end, it is worth choosing a suitable pension fund at an early stage to start saving money. We recommend a convenient life cycle fund for young people. If no choice is made, the fund will be selected by the Pension Centre (Pensionikeskus). If a young person does not want to join the II pillar, it is required to submit a statement of waiver concerning the II pillar (statement of non-payment) no later than 31 July of the year in which this person reaches the age of 18. In doing so, it should be taken into account that the next option to join will arise in 10 years.

It is possible to suspend the contributions to the II pillar up to two times during the saving period. The contributions are suspended for 10 years. After this time, it is possible to submit an application to continue with the contributions.

Those who voluntarily join the II pillar from 2021 have the option to suspend their contributions 10 years after joining.

The decision to suspend payments should be carefully considered. Before making this decision, please use the calculator on the website of

It is possible to withdraw saved money from the II pillar up to two times during the saving period. The withdrawal of money also suspends contributions to the II pillar. The next option to join the II pillar will arise in 10 years.

Those who voluntarily join the II pillar from 2021 have the option to withdraw money 10 years after joining.

The decision to withdraw money from the II pillar should be carefully considered. Before making this decision, please use the calculator on the website of

A third party can submit an application for withdrawal if a notarial power of attorney has been issued for that purpose, which contains information on the submission of a specific application.

The right to use the money saved in the II pillar on more favourable terms arises upon reaching retirement age (retirement pension age minus five years). The recipients of a pension on more favourable terms also acquire the right to receive a payment on more favourable terms in their retirement age. In case of no work ability, the money can be withdrawn without having to pay income tax.

There are three options for payouts.

  • Single payout. All collected investment units will be paid out at once. The payout is subject to 10% income tax.
  • Funded pension. Regular payout from the pension fund(s). By choosing the length of the payout to be at least the expected years lived, the payouts are subject to 0% income tax. For a shorter period (minimum period is one year), the tax rate is 10%.
  • Pension contract (lifetime or fixed-term). If requested, it is possible to enter into a lifetime or fixed term pension contract with an insurance company. To enter into a pension contract, it is necessary to contact a insurance company. Lifetime payouts are subject to 0% income tax. However, shorter, fixed-term contracts to 10%.

In order to receive payouts (single payout, funded pension), the application can be submitted at a bank representative office or via (Pension Centre). The payout is made on the 16th–20th day of the month following the payout period selected by the Pension Centre (except for an insurance contract).

For more information about your pension assets and payout options, please call our helpline at +372 631 0310.

In order to inherit the investment units, an application and a succession certificate should be submitted within 10 years from the opening of succession.

A private heir can submit an application for redemption of inherited investment units (the investment units are sold and the amount received from their sales, which is subject to income tax, is transferred to the current account of the heir) or the tranfer to their pension account. These options can also be combined: to redeem some investment units and transfer some to a pension account.

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

From 1 June 2009 until 31 December 2010 the state contributions to the 2nd pillar pension funds were suspended. Those who wanted to continue personal contribution payments were able to submit an application to continue with contributions from 2010. In 2013 it was possible to submit an application to increase contribution. The first number shows personal and the second state contribution.

Schedule Application submitted Application not submitted
01.06.2009 – 31.12.2009 0% + 0% 0% + 0%
01.10 – 30.11.2009 Submission of application to continue making contributions
2010 2% + 0% 0% + 0%
2011 2% + 2% 1% + 2%
2012–2013 2% + 4% 2% + 4%
15.05 – 15.09.2013 Submission of application to increase contributions
2014 – 2017 3% + 6% (Application to increase contributions not submitted: 2% + 6%) 3% + 6% (Application to increase contributions not submitted: 2% + 4%)
2018 2% + 4% 2% + 4%
Note: People born in or before 1954 who submitted an application to continue making contributions to the 2nd pillar pension in 2009 could not submit an application in 2013 to increase contributions because from 2010 the state contributions to their pension fund continued as usual.

The State suspended 4% contributions made at the expense of social tax for the period 1.07.2020-31.08.2021. In October 2020, it was possible to apply for a suspension of 2% of salary payments.

For those who continue to contribute 2% of their remuneration during the suspension of payments, the state will compensate for its temporary suspension of payments during the period of 2023–2024. The state retrospectively transfers such an amount to the pension fund that it did not pay during the period of suspension of payments. Therefore, the state adds twice the amount paid by the person for the period of suspension of state payments. In addition, the state also compensates for the average return of Estonian Pillar II pension funds between 1 July 2020 and 31 December 2022. If the return is negative during this period, the state will only compensate for the contributions. The compensation process is automatic and you do not have to do anything yourself.

ead more in detail about the temporary suspension of the Pillar II payments in the materials prepared by the Ministry of Finance (available only in Estonian and Russian).

By choosing Swedbank you make sure your money is invested into companies that care about fair wages, gender equality, climate change mitigation, responsible consumption and production. We believe that sustainable investments in pension funds are more resilient to the shocks such as financial crisis or pandemic.

  1. Follow your values by choosing a pension provider with sustainability ambitions. As of March 2021 Swedbank pension funds have invested:
    • 400 mEUR into green bonds or bonds screened under sustainability criteria;
    • 360 mEUR into other funds following ESG factors;
    • 570 mEUR into shares screened under sustainability criteria.
  2. Sustainable pension funds exclude damaging industries. Swedbank has a “blacklist” for companies in which we don’t invest. You can be sure that your money does not support weapons industry, coal mining or human rights violations.
  3. You can always check if your pension provider is paying attention to sustainable investments. Read about our Responsible Investment Policy here.

Investors are actively directing money to sustainable funds.

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Source: International Institute for Sustainable Developments

Support sustainable business with your pension savings

When money is invested in sustainable companies, it contributes to social and environmental well-being and responsible business.

Click on different areas to find out the impact

Source: World Federation of Exchanges


  • Employee health & well-being
  • Human rights
  • Gender equality
  • Non-Discrimination
  • Fair pay


  • CO2 Emissions
  • Energy usage
  • Natural resource usage
  • Waste and pollution
  • Climate change mitigation


  • Business ethics
  • Transparency
  • Anti-corruption
  • Reporting
  • Responsible suppliers
Documents and information which are published based on the requirements of Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability‐related disclosures in the financial services sector, can be found here.

Which fund of the II pillar fund is the most suitable for you?

Life Cycle Fund


Actively managed funds

K100, K60, K30 and K10

Fund invests in Estonia and other Baltic States, among others agree
Monthly overviews of fund investments and results agree
Fund is actively managed The Fund’s investments are chosen by our team of investment experts on the basis of comprehensive analysis. The investments are monitored regularly and their composition amended according to economic and finance market outlooks. agree
Fund invests mainly in indexes The Fund’s assets are primarily invested in index funds that follow global indexes. The index comprises a variety of securities (e.g. shares or bonds) and reflects the total value thereof. Lifecycle funds are not actively managed (i.e. the investments are not amended according to economic and finance market outlooks). agree
Risk profile of the fund changes automatically with time agree

Read more

Read more

Useful links

Call our designated pension line

6 310 310 and choose the topic pension

Fees of Swedbank pension funds are favourable

Pension fund Current fees
K1990–1999 index fund 0,33%
K10 0,37%
K30 0,66%
K60 0,65%
K100 0,66%

Fees as of 01.08.2021. You can view the current fees of all funds provided in Estonia on the website at

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