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Payment of pension benefits

You become entitled to receive the pension benefit from the pension company once reach the retirement age or at an earlier time, if an early state social insurance pension is granted to you.

Your savings in the pension fund can be paid out in three different ways:

  • you can purchase a pension annuity from the insurance company operating as a life insurer
  • you can receive a lump-sum payment (single pension benefit) or drawdown payments (periodic pension benefits)
  • you can purchase a pension annuity from the insurance company operating as a life insurer and receive a single or periodic pension benefits

The pension company calculates the amount of basic pension annuity for every member entitled to receive a pension benefit on the basis of their savings in the pension fund.

A pension annuity is compulsory if the amount of basic pension annuity calculated for the member constitutes at least a half of the basic Sodra pension. The pension annuity must be acquired for the entire amount saved in the pension fund on behalf of the member. The member is entitled to choose the payer of pension annuity, i.e. a life insurance company (information in Lithuanian), and the type of pension annuity.

Please note that the point in time at which it is mandatory to acquire one’s pension annuity depends not only on the pension scheme participant’s age, but also on the decisions taken by the management board of the Bank of Lithuania or Sodra as well as on changes in relevant legal acts, i.e. every year the Bank of Lithuania undertakes a review of the basic annuity indicator, which it may change, and Sodra may, in its turn, also decide on changing the amount of the basic pension.

Age Annuity purchase is compulsory when you reach the following amounts
62 17 107 EUR
63 16 524 EUR
64 15 942 EUR
65 15 363 EUR
66 14 786 EUR

More information on the pension annuity and its types is available on the following page of the website of the Bank of Lithuania.

The pension annuity service is offered also by AB “SEB gyvybės draudimas”. More information on the annuity offer is available on the following page of SEB.

If your savings are small

If the amount saved by you is small (calculated basic pension annuity* is less than a half of Sodra basic pension), all your savings can be paid out at once (as a lump sum).

Example

Let's say that the basic Sodra pension is EUR 130. If the amount of basic pension annuity* calculated by the pension company for you is less than EUR 65, the entire savings in the fund can be paid out to you as a lump sum. Currently, savings are considered to be small if they are up to around EUR 14 466 at your age of 62.

If your savings are extremely large

If your savings are extremely large (the amount of calculated basic pension annuity is triple the basic Sodra pension), you must conclude a pension annuity agreement with a life insurance company of your choice and acquire the annuity. The share of assets in excess of the lump-sum payment for the basic pension annuity which is triple the amount of the basic state social insurance pension can be paid out by the company in periodic instalments or as a lump-sum pension benefit.

Example

Let's say that the monthly benefit* calculated by the pension company is more than EUR 390, i.e. triple the basic Sodra pension of EUR 130. In this case, you will be paid EUR 390** each month (three basic Sodra pensions) and the remaining amount can be paid out as a lump sum. Currently, savings are considered to be very large if they are in excess of around EUR 86 802 at your age of 62.


* The basic pension annuity is an indicator of the preliminary amount of pension benefit payable every month for term of life. This indicator is calculated according to the procedure laid down by the regulatory authority. Depending on the results of calculation, the pension company determines how savings, in full or in part, can be paid out to the pension system member (as a lump-sum or periodic benefits, if the pension system member must purchase pension annuity from a life insurance company).

** The exact amount of the periodic benefit depends on the terms of pension annuity payment agreed with the life insurance company. Periodic benefits paid out by insurance companies managing pension annuities can be either higher or lower than the basic pension annuity calculated by the pension company.

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