III Pillar

III Pillar or Supplementary Funded Pension

Studies have shown that to sustain your standard of living when retiring your pension must be at least 65-70% of your previous income. It has been estimated that state funded pension and II pillar pension only supply you with 50% of your income before retiring. To conserve your standard of living at retirement you must also invest in the III pillar pension fund.

III pillar pension fund is ideally suited for long-term investing. Making regular investments to the III pillar pension fund will insure a higher standard of living at retirement.

The state favours investing into the III pillar pension fund by providing tax benefits to contributions and withdrawals. From all contrubutions made into the III pillar pension fund that do not succeed 15% of your annual gross income, the state returns 21% income tax from the contributions.

Regular lifetime payments from the III pillar are income tax free provided that the payments will start after you have reached 55 years of age and that you have invested at least 5 years into the pension fund.

Start your investments today:

• You can start contributing into the III pillar pension fund at any age.
• 21% income tax is returned from all contributions that do not exceed 15% of your gross annual income (applies to residents).
• You choose how much you want to contribute, how often you want to contribute (once a month, once a quarter, once a year etc.) and it can be changed any time.
• Minimum one time contribution is 19.17EUR (300 EEK).
• You can change into which III pillar pension fund you contribute.
• You can pause or stop contributions at any time.

III Pillar helps to sustain your standard of living:

• III pillar helps you to sustain your standard of living when you retire.
• Payments with tax advantages from the III pillar pension funds can start at the age of 55 (applies to residents)
• Lifetime regular payments are income tax free (applies to residents)

It is very easy to start investing.

To start investing into the III pillar pension fund you must have an Estonian securities account and you must make a simple payment order with the following details:

• Beneficiary: EVK (Eesti Väärtpaberi Keskregister – Estonian Central Securities Depository)
• Beneficiaries bank account: 30100984232
• Details of payment: your personal ID number
• Reference number: your Estonian securities account number

Fund Managers Contribution in III Pillar Pension Fund

Fund manager Nordea Pensions Estonia AS holds a contribution in its III pillar pension fund. The size of the contribution as of 31.12.2009 is: Nordea Pension Fund Equities 100 –  250 000 units