Taxpayers have 3 options – a) convert savings to cash, b) forward savings to III. pillar, c) catch up with payments to I. pillar. Unlike option c), both a) and b) lead to reduction of their retirement I. pillar pension.
The major administrative duties of the pension funds and participants are described below.
Pension funds’ obligation to be fulfilled by 31 March 2016:
- Inform the participants in written about the process of termination and invite them to declare how their contributions shall be settled.
- Provide the participants with contributions summary for the year 2015 (free of charge).
Participants’ oblations to be fulfilled by 30.9.2016:
- Inform the pension fund how the contributed amounts shall be settled.
- Possibilities how to settle the contributed amount are:
- transferring to the participant’s bank account
- transferring to the private pension savings or pension insurance with state contribution (III. pillar)
The saved contributions will be paid to the participants in period 15th October – 31st December 2016.
In case the participant does not declare how the contribution shall be settled, the amounts will be transferred to his personal tax account which will be administrated by the local tax authority.
Participant can make additional contribution to the statutory pension insurance (I. pillar) to cover whole period she/he contributed to II. pillar instead of I. pillar. In this case the participant has to file a request with the local social security office to calculate the amount of the additional contribution. Social Security informs the participant within 90 days about the amount, due date and payment details (the social security office already announced that such information will not be available before 1.1.2017). The additional amount shall be paid by 29.12.2017. If the supplementary contribution is not made, amount of the participant’s retirement pension will be decreased.