Your employees may decide to accumulate in the 2nd pillar pension funds to receive an extra income on top of their regular retirement pension. The employee’s contribution to the 2nd pillar totals for 3% of the gross earnings, while the Government provides additional incentive of up to 1,5% of the national average wage the year before last. Amounts to the pension fund are transferred by the employer, together with other social insurance contributions.

3rd pillar pension funds allow an employee to voluntarily accumulate for his or her retirement age. To do this, an employee needs to sign a 3rd pillar pension agreement with a chosen pension fund. Contributions to this pension fund can be made by the employee, his / her family members or an employer. The accumulated amounts are owned by the employee and can be inherited upon his or her death. Employee’s contributions to the 3rd pillar pension fund are subject to a personal income tax exemption.

Unit-Linked Life insurance combines together assets’ accumulation through investment of funds and life insurance coverage. An employer, alone or together with an employee, pays regular premiums which, after minor administrative deductions, are invested in accordance to the pre-determined investment strategy. Employer may change volume and frequency, or even suspend its contributions – the insurance agreement will remain effective and accumulated amounts invested. At termination or expiry of the agreement (which is usually long-term – 10 years or more) the accumulated capital will be paid to the insured person. If the insured person dies during term of the contract, his or her beneficiaries will receive a pre-agreed death indemnity payment. To secure your interests, title to the insurance agreement can be assigned to an employee at an agreed later date, say, after 2 – 3 years of his or her employment with your company. Unit-Linked Life insurance is also subject to tax incentives: employer’s contributions for the benefit of employees are recognized as permissible deductions and employees can benefit from the personal income tax relief.