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Estonian pension system

Pension is a regular cash payment in case of old age, incapacity for work and loss of a breadwinner.
The aim of the Estonian pension system is to help people maintain their current standard of living and monthly income when they retire.

The Estonian pension system is based on three pillars
I pillar: State pension

The state pension is paid out of the social tax calculated from salaries.

Estonian National Social Insurance Board deals with it.

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II pillar: Mandatory funded pension

Pillar II is financed from the social tax and the employee's gross salary, in addition to contributions, the size of the pillar depends on how the funds have been able to grow the amount collected.

This is handled by the pension center and service providers. 

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III pillar: Supplementary funded pension

The III pillar is completely voluntary, you can make contributions to the pillar yourself and they can be made by the employer, they are not related to the earned income. The size of the pillar is also affected by the yield of pension funds in the case of pillar III.

This is handled by the pension center and service providers. 

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The Estonian pension system leaves the possibility to retire separately from different pillars. This means that, for example, retirement from pillar I does not automatically mean withdrawal from pillar II or III, or conversely, withdrawal from pillar II or III does not have to mean simultaneous retirement from state pension. The possibilities and conditions for collecting and withdrawing a pension in the pillars are different, and in order to receive a pension from the chosen pillar, the appropriate application must be submitted at the desired time.

The state pension of pillar I is determined and applications are accepted by the Social Insurance Board. Pillar II and III applications can be submitted to the pension center, which maintains the pension register, or to service providers such as banks, insurance companies, non-profit cooperatives.

Last updated: 30.03.2023

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