9,575 people applied for a temporary suspension of second pillar pension payments in October. The suspension period would run from December to September 2021.
The finance ministry says that firms need to be up-to-date on what their employees have decided on suspending payments, which heralds, though is not directly connected to, a law change coming into effect from January 1 making membership of the so-called second pillar of the Estonian pension system, referring to employer/employee contributions, voluntary.
“We would like to remind the accountants at companies that in the second half of November that it is a good idea to make an inquiry to the pension center on whether employees who are in the second pillar will continue to collect, or have temporarily given it up,” Siiri Tõniste, head of the ministry’s insurance policy department, said via a press release.
Tõniste added that for those who plan to stay in the second pillar, accountants will have to continue withholding 2 percent of salaries and send that, together with the taxes withheld from that salary component, to the Tax Board (MTA), which will in turn transfer the sum to thepensions center(Pensionikeskus).
Temporary suspension does not equate to full withdrawal from second pillar
Those who suspended their payments will in other words get a 2 percent higher salary during the period.
Read more: ERR.EE