Pension Reform 2021
Joining the second pillar
To join the second pillar, you will need to open a pension account and choose the pension fund to which you wish to start making contributions.
The pension account is your personal account. Here you will find all the information about your second and third pillar funds: submitted applications, selected funds, received payments, acquired pension fund units and unit data and payouts.
Opening a pension account
- The pension account is opened upon submission of a choice application. You can submit the choice application at a bank or in the Pension Centre’s self-service interface, “My pension account“.
Starting on 1 January 2021, applications to join the second pillar can be submitted at any time.
Starting in September 2021, you can also choose to have a pension investment account.
In the choice application, you also choose your pension fund.
- A pension fund will be drawn randomly from a list for those who have a compulsory second-pillar pension (people born on 1 January 1983 and later) and are at least 18 years of age and employed but had not submitted a choice application at the time they received their first earnings. A pension account is also opened automatically simultaneously with the random drawing.
The drawing will take place only when you receive your first earnings.
Mandatory second-pillar participants
For younger people, it is mandatory to join the funded pension. The mandatory date for joining the pillar is 1 January of the year after the person turned 18.
You can submit a choice application for opening a pension account at any time. By doing so, you choose a pension fund that you find suitable. Your funded pension contributions will henceforth be directed to the fund you have chosen.
By entering your personal identification code on the Pension Centre’s front page, you can query the date on which you will start making funded pension contributions.
If you do not want to make funded pension payments or save money in the second pillar, then starting 1 January 2021, you can submit an application for an exemption from making contributions.
If you submit an application by 31 July in the year in which you turned 18, you will not incur an obligation to pay funded pension contributions if you start working following 1 January.
You can re-join the second pillar 10 years later, when you must submit a application for making contributions.
If the application for exemption from contributions was the first second pillar application you made and you were never under the obligation to make funded pension contributions, you must now also submit a choice application so that funds can be transferred to your selected pension fund or pension investment account (from September 2021).
Voluntary second-pillar pension investors
Voluntary participants (people born before 1 January 1983) must submit a choice application. Choice applications can be submitted at any time, but you can start making the contributions to the funded pension in January, May or September, depending on when you submit your application.
If the application is submitted by:
- 31 March – you will start paying contributions as of 1 September;
- 31 July – you will start paying the contributions from 1 January;
- 30 November – you will start paying the contributions from 1 May.
You can submit a choice application in the Pension Centre’s self-service environment, internet banks and bank branches. The choice application cannot be withdrawn.
If necessary, you can submit an application for an exemption from making contributions if at least 10 years have passed since you joined the second pillar.
If you are a voluntary subscriber and your old-age pension age (including the 5-year deadline before old-age pension age) arrives before the above-mentioned 10 years have passed, you can use the accumulated pension assets immediately.
Special conditions for submitting a choice application in 2020
Persons born between 1970 and 1982 who had not joined the mandatory funded pension were able to submit an application for joining the pillar between 1 January and 30 November 2020.
These people will start making contributions to the funded pension from 1 January 2021.
If you do not select a pension fund, the Pension Centre will open a pension account for you based on the information received from the Tax and Customs Board and randomly select a pension fund.
The pension funds in the drawing include three pension funds with the lowest current fees. The funds must invest at least 75% of the assets into stock, equity funds and other equity-like instruments. The funds on the list must be managed by different management companies. The list of pension funds to be drawn from will be determined once a year on 3 March or if that date falls on a weekend, the next business day. One of the three pension funds on the list will be drawn for you.
If a pension fund has been drawn for you and you now wish to change it, you must submit a second pillar choice application and enter the name of the fund that is suitable for you. This option will take effect immediately.
If the fund drawn for you is suitable, you can also submit a choice application with the data of the same fund, to update your data on pension register.