II pillar pension
advantages
- You effortlessly accumulate throughout your career and can earn a return on investment
- The state makes a monthly co-payment of 1.5% of the average salary in the year preceding the past year. In 2026, this amounts to EUR 33.49 per month or EUR 401.88 per year. The amount is recalculated annually
- There is a possibility to use the personal income tax relief on contributions paid by the person himself/herself
- Professional pension fund managers take care of investment return
- The accumulated funds can be inherited
New opportunities
for participants
- To withdraw 25% of the accumulated funds once, but no more than the amount paid by the participant (3% state administrative fee applies that goes to Sodra)
- To suspend contributions – suspension is possible for a 12-month period for an unlimited number of times
- To withdraw the full amount less than 5 years remaining until the retirement age if the accumulated amount is less than a half of the annuity (3% state administrative fee applies that goes to Sodra)
- To withdraw all funds without any deductions in case of losing 70–100% of the participation ability, in case one is diagnosed with a serious disease and if need for palliative care is established
Updated retirement payout
procedure
- 25% of accumulated funds can be withdrawn (irrespective of the accumulated amount), if not so done previously
- New annuity limits: higher limits have been set when one must acquire a pension annuity (i.e. periodic payouts in exchange for the accumulated amount, payable for life), i.e. no less than 10% and no more than 50% of the average old-age pension in QI last year (when the minimum annuity limit is not reached or the maximum annuity limit is exceeded, payouts are at the individual’s choice)
For comparison
|
Terms |
Before the reform |
After the reform |
|
Involvement into pension accumulation process |
New participants are involved automatically with a possibility to opt out |
No more automatic involvement. People receive invitations to become a participant |
|
Contributions |
|
|
|
Payout before retirement |
Withdrawal of funds is not possible |
Payouts are subject to a 3% state administrative fee |
|
Critical cases |
|
The full amount is paid without any deductions:
In case of death, the accumulated funds are inherited |
|
Pension payouts |
In all cases, one can choose one of three annuities:
|
In all cases, one can choose one of three annuities:
|
|
If the new terms for accumulation of II pillar pensions are unacceptable, accumulation can be terminated before 31 December 2027, and a part of the accumulated funds may be recovered. |
||
Important to know
Key terms of II pillar pension accumulation are undergoing a change, therefore, participants have time till 31 December 2027 to decide on continued accumulation under the new terms or to terminate the accumulation.
- Those who wish to continue saving under the new conditions do not need to take any action.
- If the new savings conditions are not accepted, participants have the right to withdraw from the pension savings scheme within two years, until December 31, 2027.
- Upon termination of accumulation, the participant will only be paid the pension contributions paid with their own funds and the entire investment return, while the remaining part will be returned to Sodra and converted into individual old-age pension points.
- Applications for termination of second-tier pension accumulation can be submitted via the Artea pension self-service portal or by registering and visiting the nearest Artea bank customer service branch. We recommend registering for a visit online – select the desired city and branch.
- Once the request has been submitted, pension accumulation will be terminated and the funds will be paid out within 10 days after the end of each quarter. For example, if the request is submitted between January and March, the funds will be paid out within the first 10 working days of April.
Please be careful!
You may be contacted by FRAUDSTERS posing as investment experts, Sodra or VMI employees, civil servants, law enforcement officers, or bank representatives. They may ask for your personal data and codes, logins to your banking systems, allegedly to protect your pension fund assets. DO NOT PROVIDE THIS INFORMATION! Your assets are currently safe.
Do not trust any unsubstantiated offers on social networks to invest your pension fund funds with high returns, for example in cryptocurrencies. DO NOT CLICK on any links in advertisements offering this. Otherwise, you may lose all your money.
Make sure you transfer the funds to your PERSONAL account. Do not follow the advice of other people – intermediaries or consultants – to transfer funds to another specified account. Otherwise, you may lose all your money.
If you have any suspicions, contact your pension fund company immediately.
More information on fraud prevention: Scamming methods and how to avoid them
Your income in retirement
Sodra pension will account for a significant part of your income but it will be considerably less than you will be earning right before you retire – about 40–50% of your former average income. Are you already aware of what your additional income is going to be?
Which path to take?
Following the reform, accumulation in II pillar pension funds has become more flexible, and long-term accumulation can constitute an average of 20–30 percent supplement to the Sodra pension. The decision to continue accumulating can ensure a more comfortable pension.
If you decide to leave, better retirement income can also be achieved with the help of our III pillar pension funds, which is a way to accumulate independently – it is you who decides when and how many contributions to make and how to collect the money.
You can save and invest
independently
Deposits
Artea offers some of the highest interest rates among the banks in the country.
Bonds
We have issued the largest number of bond issues in Lithuania.
Investment funds
Managers in our team are professionals, including some of the best investment managers in the world (according to Citywire).
Advanced securities trading platform
Invest into shares in the Baltic States and worldwide.
Third pillar pension
Secure your future – start saving for your pension independently.
Artea Alternative Investment Fund III
Opportunity for retail investors to invest in world-class funds that are usually only available to professional investors.
Frequently asked questions
Amendments to the Pension Accumulation Law were adopted on June 26 regarding the reform of second pillar pension accumulation, which came into force on January 1, 2026.
The fundamental conditions for pension accumulation have been changed and made more flexible. At the same time, more responsibility for second pillar accumulation falls on the accumulator himself.
Participants who started participating in pension accumulation before the end of 2025 and who find the fundamental changes to pension accumulation unacceptable, have been given the opportunity to terminate their pension accumulation within two years, by December 31, 2027, and recover their contributions and investment returns.
From January 1, 2026, pension accumulation participants will have the following options:
- to suspend contributions for a period of one year and extend this period an unlimited number of times;
- withdraw 25% of the accumulated funds once during the accumulation period, but not more than the amount of contributions paid (if the participant has not reached retirement age, a 3% deduction to Sodra applies);
- terminate accumulation and withdraw all funds without any deductions if 70-100% of participation is lost, if a serious illness is diagnosed according to the approved list of diseases, or if the need for palliative care services is determined;
- withdraw the entire accumulated amount 5 years or less before retirement if less than EUR 8,392.5 has been accumulated (a 3% deduction to Sodra applies);
- terminate accumulation until December 31, 2027, and recover your contributions and investment returns if you started participating in pension accumulation before the end of 2025.
Residents will no longer be automatically enrolled in pension accumulation schemes.
The conditions for pension payments will change in part.
Second-tier pension contributions remain unchanged. Each month, 3% of the participant's pre-tax salary is automatically deducted and transferred to their chosen second-tier pension fund.
From January 1, 2026, the accumulated amount for which an annuity must be purchased will be linked to the average amount of the social insurance pension. The minimum limit for the mandatory annuity is EUR 16,785, and the maximum limit is EUR 83,925.
If the amount accumulated is less than the specified limit, the participant may choose between purchasing an annuity, receiving periodic payments from their pension fund, or withdrawing all funds in a single payment.
If the amount accumulated falls between the minimum and maximum limits, it is mandatory to purchase an annuity. If the amount accumulated exceeds the maximum limit, the amount exceeding this limit may be withdrawn as a lump sum.
In 2026, the minimum threshold for mandatory annuity purchase is EUR 16,785. This means that those who have accumulated less than this amount can choose whether they want to receive a lump sum or periodic payments. Those who have accumulated more must choose an annuity and its type.
If a resident has accumulated more than the maximum annuity limit of EUR 83,926, they can withdraw the funds exceeding this amount as a lump sum payment.
The minimum and maximum annuity limits change every year depending on the amount of the pension, as announced by Sodra.
Those who wish to continue accumulating funds in second pillar pension funds do not need to take any action. The main conditions for accumulation remain the same. State incentive contributions also remain unchanged at 1.5% of the average wage in the country over the previous period. This amount will reach EUR 33.49 per month in 2026 (EUR 401.88 per year) and will change annually depending on changes in the average wage in the country.
If at any time during the accumulation period a participant wishes to withdraw part of the accumulated funds, this can be done once during the accumulation period. It is permitted to withdraw 25% of the accumulated amount, but not more than the amount of the participant's contributions, and a 3% deduction is applied to Sodra if the participant has not reached retirement age.
This payment cannot be divided and is a one-time payment. This means that 25% of the accumulated funds cannot be paid out in installments and it is not possible to choose, for example, to withdraw 15% of the accumulated funds once and another 10% another time.
You can submit a request to withdraw part of your accumulated funds to your pension accumulation company.
After receiving the request and verifying the data, the pension accumulation company will make a decision to pay out part of the funds within 10 working days and will transfer the funds no later than 30 days after the decision is made.
If part of the accumulated funds – 25% of the amount – is withdrawn upon reaching retirement age, the 3% deduction to Sodra does not apply. The funds withdrawn will not change the obligation to purchase an annuity.
Participation in the second pillar pension accumulation scheme can be terminated within two years, until December 31, 2027, if participation in the pension accumulation scheme began before the end of 2025.
The participant would be paid a portion of the funds – their pension contributions and investment gains. Other funds – Sodra and state contributions, to the extent that they have been paid, are transferred to Sodra and converted into points for the participant's individual pension.
Upon submission of a request to terminate accumulation, pension accumulation is terminated and the funds are paid out within 10 working days from the end of each quarter. For example, if a request is submitted between January and March, the payment is made within the first 10 working days of April.
Upon termination of second-tier pension accumulation during the transition period, only the participant's contributions and investment gains are returned. We recommend using the Artea pension fund payment calculator to calculate the preliminary payment amount.
Currently, there are more options for suspending contributions. Pension contributions can be suspended for a period of 12 months, and this period can be extended an unlimited number of times. It is important to note that when a participant does not pay contributions, the state does not transfer incentive contributions to the second pillar pension fund, except in certain cases where the participant is insured by the state, for example, when raising a child under the age of three. Contributions can be resumed at any time.
Remember that in case you rely on Sodra pension only, experts estimate that you will receive only about 40% of your former average income in retirement. For comfortable retirement, a person needs 70–80% of his/her former average income. Accumulating in II pillar pension funds, the 40% of the former average income from Sodra is supplemented with ~20–30% of the former salary amount. This is a very important part of comfortable retirement in the entire pension system both in Lithuania and in Scandinavia.
More information about II pillar pension reform can be found at: https://socmin.lrv.lt/lt/naujienos/pritarta-pertvarkai-antroji-pensiju-kaupimo-pakopa-taps-patrauklesne-ir-lankstesne/.
Remember that in case you rely on Sodra pension only, experts estimate that you will receive only about 40% of your former average income in retirement. For comfortable retirement, a person needs 70–80% of his/her former average income. To achieve this result, a three-pillar pension system has been created – you can secure such a pension by additionally accumulating in II and III pillar pension funds.
If you are not satisfied with II pillar pension system, let’s talk about how you can achieve income for comfortable retirement by selecting other investment tools. Register for a free consultation – we are ready to help you get ready for the change and answer any questions you may have. Registration is available here.
Important to know
Accumulation in pension funds entails investments risks. The pension accumulation company does not guarantee profitability of pension funds. The value of a pension fund unit can both rise and fall. You may get back less than you invested. Past investment management results of a pension fund do not guarantee the same results and profitability in the future. Past performance is not a reliable indicator of future performance.
We recommend choosing a pension fund responsibly and carefully, paying attention to the investment-related risks, applicable deductions and carefully reading the pension fund rules, which are an integral part of the pension accumulation agreement. The fund documents are available here.
Depending on the amount accumulated in the second pillar pension fund, it will be possible to withdraw it as a lump sum or in periodic payments (when up to EUR 16,785 has been accumulated) or to purchase a pension annuity (when between EUR 16,785 and EUR 83,926 has been accumulated), which can be of three types: standard, inheritable standard, or deferred. If a standard annuity is chosen, the entire accumulated amount is allocated to the purchase of the annuity, and annuity payments begin immediately and are paid for the rest of the participant's life. If you choose a inheritable standard annuity, the annuity payments are also paid for the rest of your life, and at the same time, payments are guaranteed until the participant reaches the age of 85 – this means that if the participant does not reach this age, the amount not paid out until the age of 85 is inheritable. In both cases, the entire amount accumulated in the pension fund is used to purchase the annuity, and the annuity payments are paid by Sodra. If you choose a deferred annuity, the pension accumulation company pays periodic payments until the age of 85 (the part of the assets allocated for this purpose, after deducting the funds for the purchase of the deferred annuity) and these funds will be inherited, and from the age of 85, Sodra pays the annuity payments for the rest of the participant's life. If more than EUR 83,926 has been accumulated, the portion of the assets exceeding this amount may be paid out as a one-off pension payment, and the remaining portion is paid according to the type of annuity purchased. You can find out more about pension annuities here.
All the above information is promotional, it cannot be interpreted as a recommendation, offer or solicitation to accumulate funds in pension funds managed by Artea Asset Management, asset management company within the Artea bank group. The information provided may not constitute the basis for any subsequent transaction. Although the content of this promotional information is based on sources that are considered reliable, Artea bank and Artea Asset Management are not responsible for any inaccuracies, changes in this information, or for losses that may be incurred when one invests in reliance on this information.