The payment of the social insurance benefits mentioned above is organised by the Estonian Social Insurance Board, the Estonian Health Insurance Fund and the Estonian Unemployment Insurance Fund.
- I pillar: State pensions
- II pillar: Funded pensions
- III pillar: Supplementary funded pensions
I pillar - state pensions
The following persons have the right to receive old-age pension:
- permanent residents of Estonia;
- aliens residing in Estonia on the basis of temporary residence permits or temporary right of residence.
Persons of at least 16 years of age who are declared permanently incapacitated for work with the 40 to 100 per cent loss of the capacity for work, and who have earned a following pension qualifying period in Estonia by the commencement date of establishment of permanent incapacity for work:
Age Required pension qualifying period
16-24 years No requirement for length of service
25-26 years 1 year
27-28 years 2 years
29-30 years 3 years
31-32 years 4 years
33-35 years 5 years
36-38 years 6 years
39-41 years 7 years
42-44 years 8 years
45-47 years 9 years
48-50 years 10 years
51-53 years 11 years
54-56 years 12 years
57-59 years 13 years
60-62 years 14 years
If the reason for the permanent incapacity for work is a work injury or occupational disease, pension for incapacity for work shall be granted with no requirement for length of service.
For the persons declared permanently incapacitated for work, pension for incapacity for work shall be granted for the entire period of incapacity for work but not for longer than until attaining pensionable age.
Upon the death of a provider, family members who were maintained by him or her have the right to receive a survivor’s pension. Survivor’s pension shall be granted to the children, parents and the widow or widower irrespective of whether they were maintained by the provider or not.
Calculation of survivor’s pension
The greatest of the following shall be the basis for calculation of a survivor's pension:
- Old-age pension calculated on the basis of the provider’s accumulation period and insurance components;
- old-age pension if the person has completed thirty years of pensionable service.
The amount of survivor’s pension depends on the number of family members.
The amount of survivor’s pension is as follows:
- to three or more family members, 100 per cent of the old-age pension that served as a basis for calculation;
- to two family members, 80 per cent of the old-age pension that served as a basis for calculation;
- to one family member, 50 per cent of the old-age pension that served as a basis for calculation.
To apply for survivor’s pension one should contact the Social Insurance Board.
Persons who have attained 63 years of age and who have not earned a pension qualifying period required for the grant of old-age pension and who have been permanent residents of Estonia or have resided in Estonia on the basis of a temporary residence permit or temporary right of residence for at least five years immediately before making a pension claim.
The rate of national pension is 158,37 €.
National pension is not paid to employed persons, with the exception of children under 18 years of age and persons under 24 years of age who are enrolled in daytime study or, for medical reasons, in another form of study or full-time study.
National pension is not paid to persons who receive pension from another state.
To apply for the national pension one should contact the Social Insurance Board.
II pillar - funded pensions
The funded pension is based on preliminary financing – a working person himself or herself saves for his or her pension, paying 2% of the gross salary to the pension fund. The state adds 4% from the 33% social tax calculated on the salary of the employee.
If the 33% social tax is calculated from the salary of an employee who has not subscribed to the funded pension, 13% of it is directed to health insurance and 20% to state pension, which will be paid out to today’s pensioners. When subscribing to the funded pension, 4% of that state pension will be transferred to insure everyone’s personal future and that part will not be paid as state pension.
The state pension insurance component of the person who has subscribed to the funded pension, is also respectively smaller (for the years when 16% was received for state pension instead of 20%).
Subscribing to the funded pension is mandatory for the persons who were born in 1983 and later. The right and obligation to pay the contributions arises on 1 January of the year following the year when a person becomes 18 years old.
Persons who were born between the years 1942 and 1982 had the option to voluntarily subscribe to the funded pension system. The deadline for subscribing was 31 October 2010. With the submission of the application for subscribing, the persons took a binding obligation – there is no possibility to unsubscribe from the funded pension.
The right to receive funded pension payments becomes effective when a person reaches the retirement age.
III pillar - supplymentary funded pensions
Supplementary funded pensions are additional voluntary pensions which enable you to save more and maintain your standard of living during your retirement.
Today, the supplementary funded pension allows:
- determining the amount of contributions with the possibility of changing the size of the contribution at any time,
- receiving a 20% income tax incentive on the contributions made during the year, which do not exceed 15% of the gross income (as of 1 January 2012, the absolute maximum for the contributions is €6,000),
- changing a pension fund to another pension fund or insurance contract,
- grace periods (also the option to suspend the contract).
In the future, the supplementary funded pension will allow:
- maintaining the established standard of living also at old age,
- taking the accrued sum into use already from the age of 55,
- receiving monthly or quarterly lifetime payments tax free.
The supplementary funded pension can be subscribed through one of the following options:
- by concluding a pension insurance contract with a life insurance company or
- by making contributions to the voluntary pension fund.