III pillar funds

III pillar is your personal reserve, that you can collect with monthly or lump-sum payments.

In III pillar fund your money is invested. This will give you the opportunity to grow your money for your retirement.

Although III pillar is meant for your retirement, if necessary you can use the money you have saved before retirement as well.

If you have I and II pillar, you will receive pension that will amount to only about 40% of your monthly income before retirement. This means that if you were to retire tomorrow, your pension would be less than half of what your last monthly salary was.

However, in order to maintain your standard of living, it is recommended that the pension should be around 65-70% of your current income.

With III pillar, you can make your retirement much more enjoyable.

III pillar is the only option for long-term saving that is supported by the state with income tax credit. This means that you will get a refund of the income tax on your pension contributions to III pillar. Income tax will be refunded on amount not exceeding 15% of your annual gross income or 6000 € per year.

Calculate how big your contribution could be per calendar year, in order to maximise your tax refund.

You need a pension account to collect in the III pillar. If you have never saved in the III pillar before, you must first create a pension account. You can open an account in the Internet Bank and immediately choose which fund your payments will go to.

Open a pension account

Deposits can be made both as monthly fixed payments and as one-time payments, at the time and in the amount of your choosing.

We recommend monthly standing payments, because regular long-term collecting gives better results and this way you will not forget to make contributions.

Look how useful it is to save regularly

To find out which III pillar funds are best suited for you, fill in the eligibility questionnaire.

If you need help choosing a fund and getting started, call 6 310 310 or book an appointment for pension advice.

1. Follow your values by choosing a pension provider with sustainability ambitions. As of 31.03.2023 Swedbank pension funds have invested:
   • 492 million euros to funds that follow environmental, social and governance principles (ESG aspects);
   • 820 million euros in stock and bond baskets filtered with ESG aspects;
   • 66 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 AA (source: MSCI).

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

As you get closer to retirement age, you can withdraw your III pillar money at a more favourable rate of 10% or even 0% income tax. The tax credit depends on when you started collecting. Payments made at a lower tax rate are not counted as part of your annual income.

• If you began saving before 28.12.2020,
  you can use the money from the age of 55 with a more favourable income tax rate, if you have been saving in III pillar for at least 5 years.
• If you started saving 01.12.2021 or later,
  you may withdraw the money at a more favourable income tax rate 5 years before reaching retirement age, if you have been saving for at least 5 years.

There are two ways to withdraw your money:

• Regular payouts, i.e., fund pension. If the payout period corresponds to your life expectancy, you can use the money at a 0% income tax rate. For a shorter period, the income tax is 10%. If you opt for regular payments, you need to have accumulated at least 5 years of contributions in the III pillar to qualify for the reduced tax rate. In the case of a shorter accumulation period, payments are subject to 20% income tax.
• One-off payout, on the amount of which you have to pay 10% income tax.

In the case of no work ability, you can withdraw money tax-free.

If you take money out before you reach retirement age, you will have to pay income tax on it (currently 20%).

Income tax is deducted when the payment is made and the amount from which tax has already been deducted is credited to your account.

Note that III pillar disbursements are part of your annual income and may affect your tax-free income rate.

In the event of incapacity for work, you can withdraw the money before retirement age free of income tax.

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

It is up to your heirs to choose whether to withdraw the collected money all at once or to inherit the fund units.

If the collected money is withdrawn at once, income tax must be paid on it.

In the case of inheritance, the fund units received shall be transferred to the pension accounts of the heirs and a more favourable income tax rate (10% or 0%) can also be applied upon retirement.

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