I pillar, or the state pension, is based on redistribution. This means that state pension is funded through the social tax paid by employers on the wages of employees. The social tax rate is 33%, with 20% allocated for pensions.

The aim of state old-age pension is to provide a monthly income in old age. To receive old-age pension, you must have earned a pension qualifying period of at least 15 years.

National pension

The national pension ensures a minimum pension for people who are not entitled to work contribution-based old-age pension. To receive national pension, you must:

• Have attained the pensionable age;
• Be a permanent resident of Estonia or an aliens residing in Estonia on the basis of temporary residence permit or temporary right of residence;
• Resided in Estonia for at least five years immediately before making a pension claim.

I pillar is managed by the Social Insurance Board.

I pillar, or state old-age pension, consists of four parts:

1. Base amount, which is the same for everyone: 354.9887 euros per month (as of 1 April 2024).
2. Component calculated on the basis of years of pensionable service, the amount of which depends on the years of pensionable service earned, ie the number of working years and years deemed to be equal to working (eg bringing up children, conscription). These years are taken into account up to 31 December 1998. The monetary value of one year of pension qualifying period in the monthly pension is 9.512 euros (as of 1 April 2024).
3. Insurance component, the amount of which depends on the amount of social tax paid on the pensioner’s wages since 1 January 1999. It is calculated on the basis of the sum of annual pension insurance coefficients. The annual coefficient shows the ratio of the social tax paid on a person’s wages during the calendar year to the social tax paid on national average wages. If the social tax is paid on average wages, the annual coefficient is 1.0 and its monetary value in the monthly pension is 10 euros (as of 1 April 2025).
4. Joint part, which started to accumulate from the beginning of 2021. It consists of 50% of the insurance component, which is calculated as the previously accumulated insurance component, and 50% of the solidary component. The solidary component is 1.0 if social tax has been paid for a person during the year on at least 12 times the minimum wage. If the social tax paid for the person is less than the annual minimum wage, the solidary component is calculated in proportion to their wages.

If you’ve joined the 2nd pension pillar in Estonia, a part of the social tax from your salary goes directly to your personal pension account.

This means your state pension (1st pillar) will be smaller, because 4% of the tax is sent to the 2nd pillar instead of the state pension system.

In other words, the government sends 4% of your social tax to your chosen pension fund or your personal pension investment account.

Your state pension insurance part (which is used to calculate your 1st pillar pension) will be smaller for the years when only 16% of the social tax went to the state pension instead of the full 20%.

What does this mean for your pension?

If you’ve joined the 2nd pillar, not all of the social tax from your salary goes into the state pension system. Instead, 4% is invested in your chosen pension fund, where it may grow over time depending on how the investments perform.

But because that 4% is no longer counted in your state pension, you will receive a smaller amount from the 1st pillar in the future.

By joining the 2nd pillar, you're taking more control over your future pension.

 The amount you collect in the 2nd pillar will depend on:

• your salary,
• how well your investments grow, and
• which pension fund you choose.

So while your state pension may be a bit smaller, the 2nd pillar gives you the chance to build up extra pension savings over your working life.

If you have accrued at least one year of pension qualifying period in another country during your lifetime, you are entitled to claim a pension from that country. However, the pensionable age and conditions are different in each country, so it is essential to check the specific requirements.

If you worked in a country within the European Economic Area, Switzerland, or a country with which Estonia has a social security co-operation agreement, you can do this through the Estonian Social Insurance Board. Estonia has concluded such an agreement with the following countries:

• Moldova
• Ukraine
• Russian Federation
• Canada
• Australia
• Belarus

If you worked in another country, you need to contact the pension office in that country directly.

Pensionable age and conditions

Pensionable age and the conditions for receiving a pension vary from country to country. Each country determines the basis and methods under which they pay pension. Pensions are calculated and paid in accordance with the laws of the country where you worked.

Applying for a pension

To receive pension from another country, you must submit a pension application to the Social Insurance Board, along with documents proving your pension qualifying period (eg employment contract).

Where can I find more information?

You can find out more about applying for a pension from a foreign state on the website of the Social Insurance Board.