Disbursements from the second pension pillar have become more flexible

Starting from the new year, disbursement options of the second pension pillar became significantly more flexible. In accordance with the new wording of the Funded Pensions Act, which entered into force on 1 January, a person who has the right for disbursements from the second pillar can conclude several disbursement agreements at once.

‘Before, only the few people who had saved more than 700 times the national pension rate (more than 120,000 euros) into their pension pillar had the option to conclude several disbursement agreements. Now, however, this restriction has been lifted. For example, people can now conclude pension disbursement agreements with several insurers or conclude one agreement with a guarantee period and one without,” said Indrek Holst, Chairman of the Management Board at SEB Elu- ja Pensionikindlustus, about the change in legislation.

Additionally, the Act permits insurers to refuse to conclude a disbursement agreement if the contribution is less than 50 times the national pension rate (8,797 euros), as contributions below this rate would only allow for comparatively small pension disbursements. Upon the conclusion of the agreement, each person can also choose the units of which pension funds and in what proportion they wish to purchase on the basis of each disbursement agreement.

‘We wished to make disbursement solutions of the second pension pillar even more flexible for our clients, so we amended the possibility of disbursements made to beneficiaries during the guarantee period. Now, the beneficiary chosen by the client can receive a one-off disbursement for the entire guarantee period. In the new year, we will certainly hear about more positive changes regarding pension disbursements, such as the possibility of connecting the annuity with an investment risk, which is something many clients have been waiting for,’ Holst added.

Additional information:

Julia Piilmann
Communication Manager
Communication Department
SEB Pank

phone: +372 665 5340
mobile phone: +372 5124 808
address: Tornimäe 2, 15010 Tallinn
e-mail address: julia.piilmann@seb.ee