Any person covered by the state social security system, who did not reach the retirement age, and also the persons, who are entitled to transfer the pension rights from the pension system of the European Union.
After signature of the pension accumulation agreement, the contribution to your personal account with the 2nd pension funds will consist of two portions:
- 3 per cent participant’s contribution, calculated from your wage. Wage to be received by you will be decreased by this portion
- 1.5 per cent additional incentive payment from the state budget, to be estimated from the previous year average local wage.
If you have independently enter into the 2nd Pillar Pension accumulation agreement, you will be able to select the way for accumulating the contributions:
- maximum – 3 per cent +1.5 per cent immediately
- gradual increase within 5 years (year 2019 – 1.8+0.3 per cent, year 2020 – 2.1+0.6 per cent, year 2021 – 2.4+0.9 per cent, year 2022 – 2.7+1.2 per cent, year 2023 – 3+1.5 per cent)
Persons till 40 years of age, to whom Sodra automatically selects the pension accumulation company, will accumulate the pension contributions gradually, unless one month prior to expiry of the automated inclusion into the system, they submit a request to increase the tariff to maximum.
The contributions transferred to the pension funds will be invested within the entire period of the agreement, thus if the situation is favorable, you have possibility to earn income. The amount to be accumulated depends on the contributions to be transferred to the pension funds, the term of accumulation and return on investment. The earlier you start, the more you accumulate.
If you are willing to increase the accumulated amount, you need to allocate additional contributions for the 2nd Pillar Pension. The government stimulates accumulation of funds for future– personal income tax exemption will be applied to a portion of such income.
You will not be required to transfer the contributions to the 2nd Pillar Pension Funds, whereas the contributions are administered by Sodra, after receipt thereof from your employer together with the payroll tax. The additional contribution to your pension fund account will be transferred by you periodically as a one-off payment.
The contributions will be transferred only for such periods, when you generate income that is subject to tax. In the event of unemployment, sickness, work abroad, etc. the amount accumulated in the pension fund will remain invested, however any new contributions will not be transferred. They will be automatically renewed when you start working or receive insured income in Lithuania.
If necessary, you may submit the company with one-month prior notice and you will be entitled to suspension of contributions from 1 to 12 month (however such period may not exceed 12 month within the entire accumulation period). If you do not receive any insured income (or the income from employment relations), you are not required to submit the application for suspension of contributions, i.e. if you do not earn the insured income, any contributions are not made.
You may receive the following information about your pension, if you log into the SEB Internet Bank:
- you will be able to see transferred contributions and accumulated amount and you will be able to select payment of the additional contributions
- selected pension fund, investment results
- how to switch between the pension funds
- you will receive detailed annual reports and pension fund reviews
Every participant of the 2nd Pillar Pension Fund has its individual retirement accumulation account. The funds are held separately from assets of the management company and kept with the depository.