OREANDA-NEWS. March 02, 2012. Approximately 15 000 of those accumulating their pensions through the 2nd pillar have reached the stage of pension disbursements. Even though the accumulating period has been relatively brief, pensioners who have joined the 2nd pillar scheme are now collecting pensions up to 14% higher than those who have not, reported the press-centre of SEB Group.

As at the end of last year, approximately 14 000 people who had joined the funded pension scheme were entitled to disbursements; of those, more than half have postponed collecting their disbursements. Those who have started to collect disbursements now receive on average 14% on top of their state pensions.

“Instead of the usual 30 to 40 years, today’s 2nd pillar pensioners have been accumulating assets for just 10 years. As a result, their disbursement amounts are still low. The disbursements, however, represent a fairly significant pension supplement for the average recipient of a national pension,” noted Indrek Holst, Chairman of SEB Elu- ja Pensionikindlustus.

From 1 January 2012, contributions to the mandatory funded old-age pension scheme were reinstated in full. As a result, from this year the regular tax rates – 2% (individual component) plus 4% (funded old-age pension component of social tax) – are applied when contributions to the mandatory funded old-age pension are withheld.

According to an analysis by SEB, customers are well-advised to accumulate pensions, as in the future this will provide a higher pension than if not accumulating. Thus, a customer who during the 2002 – 2011 accumulating period was earning a mean gross wage and joined the 2nd pillar scheme, and continued to make his/her contributions in 2010, will receive EUR 39 each month, collected over a period of 10 years into the 2nd pillar, on top of his/her state pension.

“Statistics indicate that more and more people are opting for an insurance policy as a solution to provide their pension disbursements, as 50 times the national pension rate has been accumulated in 2nd pillar pension funds. The higher the amount a person is able to accumulate during the accumulating period, the higher his/her disbursements will be. People who are not accumulating pillar scheme pensions should have an alternative solution to accumulate their pension assets,” Indrek Holst added.

Altogether, there are 622 732 people who have joined the 2nd pillar pension scheme in Estonia; of those, 159 087 have picked SEB to accumulate their pension assets.