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Disbursement solutions from the second pension pillar

The method of payment depends on the total value of your pension fund units and the national pension rate*:

The total value of your mandatory pension funds units Disbursement solution
50 or more times the national pension rate Pension agreement
Between 10 and 50 times the national pension rate Funded pension
Up to 10 times the national pension rate One-off disbursement

You can see the sum saved in your second pension pillar in the Internet Bank or on your account of the Pension Centre.

One-off disbursement

If the amount of money saved remains below ten times the national pension rate, you can withdraw the money saved in your pension funds as a one-off disbursement. In this case, all pension fund units belonging to you are sold and the money received from the sale is transferred to your bank account.

You can fill in a one-off disbursement application in the Internet Bank or at a branch of the bank.

Good to know

The disbursement is transferred to the current account indicated in the application during the second half of the month following the month when the application was submitted.

Funded pension

You can withdraw the money saved in the second pension pillar in regular disbursements from the pension fund if the amount of your pension savings is up to 50 times the national pension rate. Disbursements are made until no units remain on the pension account.

The amount of a regular pension disbursement depends on the period and frequency of disbursements and the number of units accumulated.

In the case of a funded pension, you can choose

  • the frequency of disbursements (monthly, quarterly, or annually);
  • the duration of disbursements. The law provides the minimum duration, which depends on your age. You may choose a longer period for disbursements;
  • whether disbursements are made based on a limit or not. Disbursements made based on a limit are generally larger, but the money may run out before the end of the minimum duration of the funded pension. Disbursements without a limit will be made until the end of the duration, but the amounts disbursed regularly may be smaller. You can change or terminate the method of disbursement of funded pension on the basis of an application. If you wish to receive your money quickly and in large payments, choose disbursements based on a limit.

Submit an application for receipt of regular disbursements in the Internet Bank or at a branch if you would like to receive a funded pension.

Changing your funded pension

In order to change the terms of your funded pension, first submit an application to terminate the existing funded pension. After that, submit a new application for a funded pension with the desired terms.

You can also stop disbursements from your funded pension. This means that the units will stay in the pension fund until you make a new decision.

Good to know

Disbursements from funded pension are made during the last month of the period. The first quarterly payment will be transferred to your account during the third month after submitting the application, while the annual payment will be transferred during the 12th month.

Pension agreement

If you have saved more than 50 times the national pension rate in your second pension pillar, you may conclude a pension agreement, on the basis of which regular disbursements are made to you until your death.

The frequency that can be selected for the disbursements is either a month or a quarter.

Guarantee period is an additional option offered by the pension agreement. If the person who entered into the pension agreement dies during the guarantee period, the beneficiary specified in the pension agreement will receive pension payments until the end of the guarantee period either at a frequency chosen by you or as a one-off disbursement. No limitations apply to the length of the guarantee period: you can select the period when you enter into the agreement.

Good to know

  • You can withdraw from the agreement within 14 days. To do so, you will need to fill in a withdrawal application at a branch of the bank.
  • You can change the beneficiary during the term of the agreement in the Internet Bank or at a branch of the Bank.

If you have any questions, register for a free consultation or call us at 665 5100.

Terms and conditions

The guaranteed interest rate, fees, and life expectancies of the SEB Pension Agreement (EST)

Good to know

You can keep saving while working. If you decide to keep working, the mandatory pension fund payment is still deducted from your wages until you decide to use the second pillar savings.

If you continue to work when disbursements have started, contributions to the second pension pillar will continue until the end of the year of the first disbursement. For example, if you submit the disbursement application in March, mandatory pension fund payments will be deducted from your wages until December.

You are not obligated to withdraw your savings. If you do not withdraw the savings in your second pension pillar, they will be left to your heirs. You should take into account that the value of units increases and decreases in accordance with the changes in their prices.

You need to submit an application to receive disbursements. You can submit an application for a one-off disbursement or funded pension at a branch of SEB or in the Internet Bank, where it is easier and cheaper. Register for a meeting with an SEB adviser to conclude a pension agreement.

Taxation of disbursements from the second pension pillar

Pension disbursements are subject to income tax pursuant to the legislation of the Republic of Estonia. Income tax is calculated on the basis of the tax-exempt rate applicable to individuals.

As of 1 January 2018, basic exemption of a person is €500 per month or €6,000 per year.

All II pillar disbursements increase the yearly income, on the basis of which basic exemption is calculated. Therefore, starting from 2018, disbursements from the second pension pillar may decrease basic exemption. If this is not taken into account when paying taxes throughout the year, the person must pay additional income tax for the decrease in basic exemption.


* The national pension rate is a sum calculated based on an index confirmed by the government. As of 1 April 2017, the national pension rate is 175.94 euros.

Legislation governing the tax system may change. Taxation depends on individual circumstances relating to a client, including their residence, etc.

Any questions?



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