OREANDA-NEWS. March 12, 2012. SEB Elu- ja Pensionikindlustus revised its price list for benefit disbursements under pension contracts for second pension pillar products, making it more attractive for the client. The purpose of the change is to provide the customer with a good and competitive solution for the time when accumulated assets are disbursed in pension benefits, reported the press-centre of SEB.

“Although we have relatively few clients qualifying for the second pension pillar contract, at present, this is quite clearly a market that will be growing over time, which is why it is important to give our clients an opportunity to review the terms and conditions of products early on. Due to product risks, we have opted for a conservative approach in pricing the benefit disbursement product for the second pillar. On the other hand, we have to ensure competitive pricing, since for a customer buying a pension for life, this is the most important indicator,” Indrek Holst, Chairman of the Management Board at AS SEB Elu- ja Pensionikindlustus, commented.

To the changes in the price list, the standard principle continues to apply – the higher the amount accumulated, the more attractive the benefit disbursement terms for the clients. This is mainly due to the fact that a portion of the fees comprised in the price are of fixed size for every contract.

For instance, a client aged 63, about to retire, who has accumulated EUR 15,000 in their second pension pillar, will be receiving EUR 75.90 euros monthly from SEB. Yet if a client of the same age has accumulated EUR 30,000 euros in their second pension pillar, they will be receiving, after concluding a pension contract with SEB, EUR 153.50 monthly in addition to their state pension. Under the old price list, the client would have received EUR 143.40.

By law, the disbursement of pension benefits depends on the amount accumulated in the second pillar, dividing benefit disbursements into three:

If less than 10 times the national pension rate, or less than EUR 1283.86 euros (EEK 20,088) has been accumulated, the person having accumulated the pension is entitled to a disbursement of the amount in a lump sum.

If up to 50 times the national pension rate, or up to EUR 6419.29 (EUR 100,440) has been accumulated, the person having accumulated the pension can withdraw it from their pension fund in periodic disbursements.

If more than 50 times the national pension rate, or over EUR 6419.29 (EEK 100,440) has been accumulated, a pension contract is concluded with the person having accumulated the pension.

Today, in addition to Compensa Life and ERGO, SEB is one of the three financial enterprises on the Estonian market providing pension benefit disbursement products.