Pension Reform 2021

To receive a lifetime pension, an insurance agreement must be concluded with an insurance company.

When entering into a pension agreement, the assets accumulated in the second pillar will be transferred to the insurance company you have chosen. You may elect to transfer the whole amount or just a part of it.

The amount of the pension will be calculated by the insurance company, using special formula for calculating annuity. The amount of the pension depends on your age, the amount desired for entering into the pension agreement, the average life expectancy, and the terms and conditions of the pension agreement.

Insurance agreement with guarantee period

A pension agreement may be entered into with a guarantee period, which ensures that, in the event of your death, disbursements will continue to the person specified in the agreement until the end of the guarantee period. This person is referred to as the beneficiary.

In the case of a pension agreement with guarantee period, the disbursement is slightly smaller than for an agreement without a guarantee period. The difference is bigger, the longer the chosen guarantee period.

If the amount you desire to be used for the lifetime pension agreement is too small, the insurance company may decline to enter into the agreement.

The following insurance companies enter into pension agreements:

• Compensa Life Vienna Insurance Group SE

Termination of payment duty

Contributions to the second pillar of the pension cease according to the time of submission of the application as follows:

Submission of application

• From 1 December to 31 March – the end of the duty on 31 August;
• From 1 April to 31 July – the end of the duty on 31 December;
• From 1 August to 30 November – end of duty 30 April.