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If you want to rest assured that you have done everything for your subsistence at older age, it would be wise to effect both the second and third pillar pension insurance at early age. The Estonian population is unfortunately ageing; the number of people in active employment and the number of taxpayers is decreasing. This means that the future state pension will be so small that it just will not suffice.
Three pension pillars. What are they?
1st pillar: state pension paid by the state. 20% of funds are derived from social tax which your employer pays the state and which the Pension Board divides among the present pensioners.
2nd pillar: pension scheme, to which you contribute individually in cooperation with the state. As an employee, you direct 2% of your gross wages to personalised pension account, to which the state adds 4% of your current social tax payments. Your pension is made dependant on the contributions made to the scheme during your employment.
3rd pillar: voluntary pension schemes. Gives you a sense of security that at pensionable age you can maintain your developed living standard. You make individual contributions according to your possibilities and needs. The state supports you with income tax incentives.
On the basis of the Funded Pensions Act ERGO Funds AS alters the conditions of pension funds. From July 13, 2009 the conditions of supplementary funded pensions funds (ERGO Pensionifond 3P1, ERGO Pensionifond 3P2 and ERGO Pensionifond 3P3) and from January 1, 2010 the conditions of mandatory funded pensions funds (ERGO Pensionifond 2P1 and ERGO Pensionifond 2P2) shall be altered.
According to the assessment of the fund management company ERGO Funds AS and the Financial Supervision Authority the alterations do not affect the contents and do not change the nature of the fund.
You can read the new conditions of the funds here:
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