Upon succession of pension, transfer of units as well as monetary payments is possible
Until the end of the last year, the units of the second pillar of the funded pension could have been bought, from this year monetary payments are also made upon succession of the units of the second pension pillar. Payments to 380 people have been made since 1 January, the average amount of payment being 9000 kroons.
In the case of succession, inherited units may be transferred to one’s own pension account or withdrawn in cash, one part of the inherited units may be transferred to the successor’s pension account and another part withdrawn in cash. It should be also borne in mind that upon withdrawal of units in cash, income tax shall be withheld on the amount of payment.
“People have started to withdraw the pension fund units more in cash, but the possibility of transferring the units to one’s own pension account and the benefit a successor may derive from those units at his or her retirement age should also be considered,” commented the Kristel Johanson, Managing Director of the Estonian Central Securities Depository.
Successors have to submit an application to an appropriate bank office for payment of the inherited units in cash or transfer to their pension account, and a copy of the notarised succession certificate. The bank will forward the necessary documents to the Estonian Central Securities Depository.
In the first quarter, the total volume of the mandatory funded pension funds increased from 7.4 billion kroons to 8.3 billion kroons. Compared to the growth in the same period of last year: 2007 – the growth of 0.9 billion kroons, 2006 – the growth of 0.6 billion kroons.
In the first quarter of 2007, the number of joiners to the second pension pillar increased by 6081 people. As of 31 March, the number of joiners totals 525 807 people.
Within the first quarter, the EPI index reflecting the average productivity of the funded pension funds increased only by modest 2.42 points, reaching the level of 147.79 points.
Detailed information about funded pension can be found at the homepage of Pensionikeskus: www.pensionikeskus.ee Register of subscribers to the funded pension shall be kept by the Estonian Central Securities Depository.