[Updated in 2024] How to make the most of your third pillar pension?

How do we use membership fees?

Membership fees are used to develop the Association and to represent the interests of members. The fees of our first members were used to raise the fund’s initial capital, introduce Tuleva to the general public, and make preparations to start the fund, including application for an activity license from the Financial Inspectorate. From this point forward, membership fees will be used for the following activities:

• Membership community management and communication
• Development of Tuleva’s web page, blog, and other informational channels
• The creation of proposals and influence analysis to improve the Estonian pension system, in cooperation with the Ministry of Finance and other state organizations
• Development of Tuleva’s IT systems
• Preparation and analysis of voluntary savings products and Third Pillar options

Your joining fee helps to bring well thought ideas with big impact to decision-makers.

Every euro saved gives a Swede almost a third higher pension than the same amount saved by Estonians. Estonia needs a smarter and measurable pension strategy.

As the first and only association representing pension savers, Tuleva is a credible partner for Ministry of Finance and state legislative bodies. We participate in pension strategy discussions, where next to the officials only banks and insurance companies used to be represented.

We help to make better laws. The laws that protect the people. The laws that maximize our profits from our, not banks’ savings.

We have our first achievements. For example

• On Tuleva’s initiative, people in Estonia saved only during last year 1.5 million euros, because the fund managers are no longer allowed to charge high fees for changing the pension fund.
• We sent a petition to parliament, signed by 2300 people, that proposes to reform how people can use their II pillar savings.

We do not organise demonstrations or spread random complaints. We are direct, we analyse issues and offer constructive solutions.

Tuleva is a social company with a goal to earn profit for its members.

Tuleva’s main principle is that people themselves save money for their future, using contemporary technologies and bypassing unnecessary middlemen and costs as much as possible.

Every year, each member who has transferred their second or third pillar to Tuleva pension funds, earns a member bonus. Member bonus is very small at first, but it will grow together with member’s pension assets. Bonus is transferred to your personal capital account at Tuleva. This is your ownership stake in Tuleva capital and this stake can earn you additional profit.

When Tuleva grows, our funds under management grow and we add new products to our offering, then the association will earn profit. The profit is then divided among members, as set in our Articles of Association.

As always with profit from entrepreneurship – this depends how well our venture is doing. The founders are convinced, that the 125-euro joining fee pays for itself many times over. But we do not give promises.

How is member bonus calculated?

At the end of each year

• We calculate how many pension fund units each member had on average during the year in euros
• Multiply this by 0,05% and transfer the resulting amount to member’s capital account
• Every 5 years, members annual meeting decides whether to pay our accumulated profit as a dividend or keep it invested.

Tuleva is for people who care.

Every member has a vote on annual general meeting and has a right to elect and be elected to Tuleva’s board of directors and other supervisory bodies. This is the official part and it is very important.

Every day we share our ideas and experience among Tuleva members in our Facebook group, e-mail, phone and working groups. Among our community, there are people who care about the society and have very different skills. Many are ready to take responsibility for ensuring us a better future.

Tuleva team listens very carefully to our members and uses their ideas for making Tuleva better. We are only starting and believe that the power of thousands of smart people can be used for increasing our common good.

How does the calculator work?

Tax benefit is simple: the government pays you back the income tax on your third pillar contributions. Tax benefit applies to contributions that do not exceed 15% of your gross income or 6000 euros, whichever is smaller.

Your maximum contribution amount to third pillar is thus 15% x gross annual income. If your annual income is over 3333 euros per month (gross), then you can contribute to third pillar 6000 euros.

Tax benefit equals 20% x your third pillar contributions.

NB! Your tax benefit cannot be bigger than the income tax you have paid during the year. Thus: if your gross income is less than 614 euros a month, then your maximum contribution is less than 15% of your income. More precisely – your maximum contribution per month is then: gross monthly income x 0.964 – 500.

With less than 519 euro monthly income you are not paying income tax most likely and hence you do not have any tax benefit in contributing to third pillar.

Check the e-tax board to see how much gross income you have received this year

1. Log in to the e-tax board
2. In the menu on the left, select Registers and inquiries -> My income. You can see the gross income earned this year on the basis of the data that payers have submitted to the tax office to date. Check whether income tax has been withheld from the payment amount or not, according to the payer. To do this, click on the name of the person making the payment, and in the last column of the summary information, you will see information about the withheld income tax.
3. NB! It is possible that your employer(s) have not yet declared the salary data for the last month(s) of the year. You can check this by clicking on the name of each payer.

If you know that income is still coming to your account this year, add it yourself.

Please note that all income that reaches your account this year will be included in the calculation for this year (if the December salary is received in January, it will be included in the next year’s income calculation).

You can also add income that you plan to declare in the income tax return this year: rental income, interest paid by crowdfunding portals, income from the transfer of securities or other property.

Don’t worry if you don’t know the exact amount of your annual gross income today. Calculate the approximate amount and then find the optimal third pillar money placement with the calculator. If the actual annual income turns out to be higher than expected, your contribution will simply be slightly below the income tax allowance limit. Nothing terrible will happen even if you put a little more than the tax credit limit in the third pillar. The law does not prohibit it – if you exceed the limit, you simply cannot get the income tax back.