- Estonian pension system
- I pillar
- II pillar
- III pillar
Employers transfer the 2% withheld from the gross salary of their employees to the Tax and Customs Board and also fill out a related tax declaration. Pursuant to the Taxation Act, the sums of the funded payment contributions and the tax declarations must be sent by the employer by the 10th date of the month following the month when the sums were withheld.
The Tax and Customs Board checks correctness of the submitted declaration. The Tax and Customs Board also adds 4% of your social tax to the sum paid by the employer. The sums are transferred to the bank account of the Estonian Central Securities Depository (ECSD) in the state treasury.
The Tax and Customs Board has 15 working days to check the contributions and declarations and to transfer the money to the ECSD.
ECSD as the registrar of the Estonian central register for securities calculates the number of units of the pension fund chosen by the owner of the pension account based on the received sum and transfers the money to the respective pension fund.
Example: The contributions withheld in January must be transferred by the employer to the Tax and Customs Board by no later than 10 February. If the employer forwarded the funded pension contributions and declarations correctly, the units will be issued by no later than on 4 March.
NB! The funded pension contributions are withheld by your employer although you are the taxpayer. Changing one’s job does not obstruct or influence collection of the funded pension.