Pension Investment Account
When you enter into a PIA agreement, you must choose how large a share of the pension assets that have been accumulated so far you would like to transfer to the PIA. Based on your decision, we will submit an application to Estonian Funded Pension Registry that will transfer the requested amount to your PIA.
If you submitted an application to transfer money from your current pension fund to the PIA no later than:
- 30 November, the money will be received in the PIA on the working day following the 1st of January;
- 31 March, the money will be received in the PIA on the working day following the 1st of May;
- 31 July, the money will be received in the PIA on the 1st of September or the working day following it.
When signing the PIA agreement, you can choose to direct your regular 2nd pillar contributions (2%, 4% or 6% of your salary + 4% from the state) to your PIK. If you make this choice, your next contribution will reach your PIK by the end of the following month at the latest.
Open your PIA agreement
View and cancel your previously submitted pension applications
No, you do not, because PIA is a bank account included in the II Pillar system. This means that payments made to PIA are not the same as withdrawing money from the II Pillar (in which case income tax of 22% would apply).
By using PIA, you can also continue making contributions to your II Pillar at a contribution rate of your choice.
LHV cannot provide specific recommendations, and you need to make investment decisions yourself.
In general, your choice of securities should align with your goals, risk tolerance, and investment horizon.
Some starting points to consider:
- If you have more than 10 years until retirement, many investors are willing to take on higher risk (e.g. equity funds or exchange-traded funds (ETFs) that invest in stock markets).
- If your time horizon is shorter, it may be worth considering more conservative options (e.g. funds investing in bonds).
- Diversification — across different asset classes and regions — helps reduce risk.
On the LHV Pension Investment Account page, we have provided examples of how exchange-traded funds allow you to invest in hundreds of companies worldwide or in specific regions with low costs.
All PIA transaction fees are 0 € – both for automatic investments and manual trades.
You can change your automatic investment preferences in the Internet Bank under Pension → Pension Investment Account → Edit portfolio.
If you have directed your regular pension contributions to your PIK but wish to change this choice, submit a new selection under Pension → Pension Investment Account → Contributions → Edit.
If you want to change your fund transfer application, first cancel the previously submitted application under Pension → Application history, then submit a new application under Pension → Pension Investment Account → Contributions → Edit.
Receiving the funds to your PIA is dependent on when you submitted the PIA application.
Exchange Application
| Application submission date | Date of funds transfer | |
|---|---|---|
| 01.12-31.03 | Next business day following May 1 | |
| 01.04-31.07 | September 1 (or the next business day if September 1 falls on a weekend) | |
| 01.08-30.11 | Next business day following January 1 |
If you are a new voluntary joiner (person born before 1 January 1983 who did not have the II pension pillar), the first contribution will arrive later.
| Application submission date | Date of funds transfer | |
|---|---|---|
| 01.12-31.03 | from 1 September | |
| 01.04-31.07 | from 1 January | |
| 01.08-30.11 | from 1 May |
*Deposits to PIA occur during business days only.
If you’ve directed your monthly pension payments to PIK, the money will be deposited to your PIA by the end of the next month the latest.
You can transfer available money from your PIA back to your pension fund at any time. One can only transfer money (in euros) from a PIA to a pension fund. Other assets should first be realized (e.g., securities sold and deposits closed), the money received can then be transferred back to the pension fund.
To make a transfer, submit an exchange application in the Internet Bank by selecting Pension → Pension Investment Account and clicking the three-dot icon in the top right corner of the page. A menu will open with the option “Transfer free funds to a fund/another PIA”. In the application, indicate the amount to be transferred in euros and the pension fund whose units you wish to purchase using the funds in your PIA.
Once you confirm the application, the money will be transferred from your PIA to the selected pension fund during the next 3 business days at the latest. The submitted application cannot be withdrawn or modified.
You can submit multiple exchange applications from your PIA, but to submit a new application, the previous one must be executed first.
If you have another PIA opened at a different bank, you may use the same pension exchange application to transfer the free funds from your LHV PIA to your other PIA located at another bank.
You can sell all securities bought for you PIA with automatic investment in the regular way. Enter the securities sales order in the internet bank section “Investing” → “Buy-sell” → “Stocks and index funds” or in the detail view of the security in the mobile app.
The price list of an ordinary transaction applies to the sales transaction.
In order to transfer money from the PIA to your current account, you need to submit the application on leaving the II pension pillar on the website of the Estonian Funded Pension Registry. At the earliest, you can expect to receive the money five months as of the date of submission of your application.
| Period for submitting an application to withdraw money | Money will be paid out (at the latest) |
|---|---|
| From 1 December to 31 March | On 20 September |
| From 1 April to 31 July | On 20 January |
| From 1 August to 30 November | On 20 May |
If you terminate the II pension pillar agreement and withdraw the money, you will have to pay 22% income tax on the total amount withdrawn. Furthermore, you will not be able to join the II pillar again for the next ten years.
More information
If you do not want to leave the II pillar, you can transfer the money from the PIA, for example, back to the pension fund or to a PIA that you have opened with another bank. To this end, you need to prepare an ex change application where you can specify where you want to transfer the money in your PIA. It is possible to only transfer money (in euros) to another bank or pension fund, not shares or units.
No, you can only invest into stock exchange listed securities through PIA. But you can find real estate focused funds and companies also from exchange listed securities.
Yes.
Yes, II pillar assets, including assets on your pension investment account, are inheritable.
No.
Funds can be transferred to a PIA only from II Pillar assets or from monthly II Pillar contributions. You can adjust the size of your personal contribution for monthly payments yourself.
If you submit an application to change the contribution rate before November 30 and choose your preferred rate (2% – default option, 4%, or 6%), contributions at the new rate will start from the beginning of the new year.
The state contribution (4% from social tax) always remains the same and does not depend on the rate you choose.
When there is less than five years until the retirement pension age, you will have three options for receiving your funds:
- One-time disbursement
When choosing this option, you have the possibility of transferring a specified cash amount from your Pension Investment Account to your bank account.
Disbursements can be partial or in-full. One-time disbursements can be done whenever you like. The money is paid out the next working day after submitting your disbursement application to the bank. - Fixed-term pensions from a pension fund
In the case of a funded pension, you will receive regular payments from the pension fund you have chosen.
If you have available funds in your PIA and would like to use them to purchase pension fund units, submit an application to the bank.
After that, you can set the period and frequency of your funded pension payments via the LHV Internet Bank or on the Pensionikeskus website. - Fixed-term or lifetime pension agreement with an insurance company
In the case of a pension agreement, an insurance company will make regular pension payments to you in a guaranteed amount.
To conclude the agreement, contact an insurance company and then submit an application to the bank or via the Pensionikeskus website to transfer funds from your PIA to the insurance company.
The following insurance companies offer pension agreements:
Compensa Life Vienna Insurance Group SE
A lifelong pension and a fixed-term pension with a recommended duration or a longer period, paid monthly or quarterly, are exempt from income tax. Pensions with a shorter duration and one-time payouts are subject to a 10% income tax, except in cases of reduced work ability, where the pension is tax-free regardless of the payout method.
It is possible to combine disbursements, for example, in the following ways:
- Apply for a one-time payment → you will have to pay 10% income tax on the payment amount;
- Transfer a part of your available funds to a pension fund and open a funded pension → depending on how much time you have left before your retirement age you will pay either 10% income tax or 0%;
- The rest of the available funds can be transferred to an insurance provider for a lifetime guaranteed pension → pension disbursements are tax free.
Opening a PIA account automatically involves two additional accounts:
- Pension Investment Account (PIA)
- This account receives all purchases of securities and funds.
- From this account, you can make a transfer to your PIA automatic investment account. Assets purchased through the automated system will be credited to this account.
- PIA automatic investment
- You can transfer money to this account from the PIA to purchase assets through automatic transactions.
- For the money credited to the account, transactions are made once a week, generally on Wednesdays.
PIA or securities transactions carried out through a PIA do not have to be declared to the Estonian Tax and Customs Board. PIA is treated as a pension fund: contributions are exempt from tax and withdrawals are taxed on the full amount withdrawn.
Tick “Income received in the pension investment account“ in table 5.1 and 7.1. This way the dividends and interest received on the Pension Investment Account will not be calculated as your annual income nor influence the amount of tax-free income.
If you received interest on financial assets acquired via a Pension Investment Account from which income tax has been withhold and the interest has been prefilled in Table 5.1 of the income tax return, then tick the respective line. In that case the withheld income tax will be refunded.