Joined the Pillar II but leaving Estonia? Here’s what you need to know

For people who joined Estonia’s Pillar II and are now relocating abroad.

Lately we have been getting more calls from people who joined the Pillar II, are now leaving Estonia, and want to withdraw their savings. For many, this is when they find out that withdrawal isn’t yet possible. It’s frustrating to learn a rule like this after you’ve already joined, and we agree it should have been clearer from the start. This post explains the rule, why it exists, and what you can do.

If you joined Estonia’s Pillar II voluntarily, your savings remain invested and continue growing alongside global markets. Before leaving Estonia, there are two rules worth knowing: you cannot withdraw your savings, and you cannot stop contributions, until 10 years have passed since joining.

This restriction comes from Estonian law (the Funded Pensions Act), administered by the state through Pensionikeskus, not from Tuleva. This rule is set by Estonian law and administered through Pensionikeskus. It applies equally to all pension fund managers.

Estonia’s pension system has three pillars. The Pillar I is the state pension. The Pillar II is a funded pension where you contribute 2%, 4% or 6% of your gross salary and the state adds 4% from social tax. The Pillar III is voluntary savings with flexible withdrawal at any time.

People born before 1 January 1983 were never automatically enrolled. For them, joining the Pillar II was always a voluntary choice. The same applies if you moved to Estonia and joined the Pillar II: you joined voluntarily too. That voluntary status is what triggers the 10-year rule.

The 10-year rule: according to Pensionikeskus: “The choice application cannot be withdrawn. If necessary, you can submit an application for an exemption from making contributions if at least 10 years have passed since you joined the second pillar.”  The same 10-year rule also applies to withdrawing your pension savings before retirement age.

So if you joined in 2022, the earliest you can withdraw is 2032. The exception is if you are within 5 years of Estonia’s retirement age of 65 (i.e. from age 60), which unlocks early access regardless of when you joined.

The purpose of the 10-year rule is to support long-term retirement saving. It reflects what a pension fund is for: growing savings steadily over time. Pension funds are designed for long-term saving. A minimum holding period helps keep the system focused on that purpose.

The 2021 pension reform actually made things considerably more flexible. It made the Pillar II entirely voluntary, allowed pre-retirement withdrawals, and removed many exit fees. The 10-year minimum was kept because a pension fund with no lock-in at all would not function as long-term savings.

Tuleva has consistently lobbied for lower fees and greater flexibility for savers, and we will continue to do so. Among the changes currently under discussion is shortening the 10-year restriction to 5 years, although nothing has been decided yet. For now, the rule applies, and we are bound by it equally with everyone else.

For most people leaving Estonia, the main option is to leave your existing savings invested.

Stopping contributions requires 10 years of membership. According to Pensionikeskus, you can only submit an exemption from contributions application once at least 10 years have passed since you joined. If you have been a member for 10 or more years, you can submit the application through Pensionikeskus self-service or your Estonian internet bank – salary deductions stop, but your accumulated money stays in the fund and keeps growing. If you joined less than 10 years ago, the formal exemption is not yet available. In practice, contributions stop naturally once you leave Estonian employment and no longer receive salary from an Estonian employer.

The practical reality for most people leaving Estonia: once you stop receiving an Estonian salary, contributions stop naturally. No action needed. The formal exemption matters only if you remain employed in Estonia and want to halt contributions before 10 years are up. That, unfortunately, is not yet allowed.

Leave existing savings invested. You do not need to be an Estonian resident for your money to stay in the fund. Moving abroad does not change how your savings are invested. Your money remains invested and continues to grow with the markets. Tax depends on your age when you withdraw: 22% before retirement age, 10% from age 60 (within 5 years of retirement), or potentially tax-free as a long-term pension at retirement age.

This is usually the best choice financially. The money keeps working for you while the lock-in period runs out.

You are 60 or older. You can start withdrawals regardless of when you joined, because you are within 5 years of Estonia’s retirement age (65). A reduced income tax rate of 10% applies, compared to 22% for earlier withdrawal.

You joined in 2015 or earlier. Your 10 years may already be up. Check your exact joining date at Pensionikeskus self-service. To submit a withdrawal application remotely you will need a valid Estonian ID, Mobile-ID, or e-residency digital ID.

Plan ahead: identity verification is the biggest practical hurdle. When you eventually withdraw your savings, you’ll need to verify your identity. This is the most common problem people run into after leaving Estonia, especially once their Estonian ID and Mobile-ID expire. Three routes still work from abroad: visit an Estonian bank branch in person, apply for Estonian e-residency, or authorise someone in Estonia through a notarised power of attorney. See the FAQ below for details, and plan early to keep your options open.

Your money stays safe and keeps working for you in your Pillar II fund (with Tuleva, that’s a globally diversified index fund; other funds may follow different strategies). When the time comes, you can transfer it to any EU bank account, wherever you are.

Questions about your specific situation? Write to us at [email protected]. We’re happy to talk it through.

1. How do I find out exactly when I joined, and when I can withdraw?

Log in to Pensionikeskus self-service (“My pension account”). Your exact joining date is shown there. Add 10 years and that is your earliest withdrawal date.

If you are 60 or older, you may qualify for early access regardless of joining date. See the section above on early eligibility.

2. I’ve already left Estonia. Can I still manage my account?

Yes, but identity verification is required for any application. This is the most common practical obstacle for people who have left Estonia, especially once their Estonian ID and Mobile-ID expire. Three routes:

1. Visit an Estonian bank branch in person. Any major bank (Swedbank, SEB, LHV, Luminor, Coop Pank) can process your application. A valid foreign passport is sufficient. No Estonian ID required.
2. Apply for Estonian e-residency. A digital identity that lets you sign documents remotely from anywhere. The state fee is €150 and the process takes 3–8 weeks. Pickup at Estonian embassies or designated points abroad. Details at e-resident.gov.ee.
3. Authorise someone in Estonia to act for you. A notarised power of attorney lets a trusted person submit applications and manage your account on your behalf. Estonian embassies abroad can also notarise documents.

Applications cannot be submitted by email or post. The law requires verified identity.

3. How are my pension savings protected against business and geopolitical risks?

Your pension assets are held separately from Tuleva’s own assets by law. They cannot be touched even if Tuleva ceased to exist. Swedbank acts as an independent depositary bank and confirms every transaction. The assets would be transferred automatically to another licensed fund manager under state supervision.

Three layers of protection: Finantsinspektsioon (regulator), Swedbank (depositary), state guarantee fund. Estonia’s pension system has operated continuously since 2002.

Geopolitical risk is on many people’s minds right now. Many wonder how their pension savings would be protected if a war situation were to arise in Estonia.

At Tuleva, we do not invest specifically in Estonia and all of our assets are held outside Estonia. Our funds invest in index funds managed by BlackRock, the world’s largest asset manager. These index funds, in turn, invest in shares of nearly 3,000 of the world’s largest listed companies. The registry of BlackRock index fund units is maintained by JPMorgan, one of the world’s largest banks. The units belonging to Tuleva pension funds are held in a separate account in that registry.

4. Can I stop salary deductions right now?

Only if at least 10 years have passed since you joined. Pensionikeskus requires that 10 years have elapsed before you can submit an exemption from contributions application. If that threshold is met, log in to Pensionikeskus self-service and submit the application – it takes about five minutes online, or you can do it through your Estonian internet bank (Swedbank, SEB, LHV, Luminor, or Coop Pank). If fewer than 10 years have passed, the formal exemption is not available. Contributions stop naturally once you leave Estonian employment.

A note on timing. Applications take effect at the next “window”:

So there may be a few months of deductions remaining after you apply. Stopping contributions does not affect the 10-year withdrawal clock. That clock runs from the date you first joined, regardless of whether you are still contributing.

4. The 22% tax: what does it actually apply to?

The 22% income tax applies to the entire disbursed amount, not just gains. This is because contributions were made from pre-tax income: the state did not tax the money going in, so it taxes the money coming out.

This is why waiting until retirement age makes a real financial difference. A simple example on a €5,000 balance.

5. I’m moving to another country. Will I be taxed twice?

Estonia has tax treaties with most EU countries and many others, which generally prevent double taxation on the same income. The 22% (or 10%) withheld in Estonia is usually credited against tax owed in your new country of residence. The exact treatment depends on your specific country and personal situation. Check with a tax adviser in your new country before making a withdrawal.

6. What if I die before I can withdraw?

Your pension fund units are inheritable. Your heirs receive your accumulated assets and can either keep them in their own pension account or withdraw in cash (22% income tax applies to cash withdrawals by heirs). No separate inheritance declaration or nomination form is needed. Assets pass automatically under Estonian inheritance law. Heirs should contact Pensionikeskus to start the process.

Sources: Pensionikeskus: Joining the Second Pillar; Pension Reform 2021; Pensionikeskus: Payments before reaching pensionable age; Tuleva: Pillar II is your asset. Governing legislation: Funded Pensions Act (Kogumispensionide seadus).

Tuleva is not a legal adviser; for advice specific to your situation, contact Pensionikeskus directly.