If you haven't started working yet, retirement is probably a distant prospect that's too early to think about now. However, it's important to know that the earlier you start saving for retirement, the more money you'll have available to you when you retire.

Compulsory contributions

Compulsory pension contributions start to be deducted from your monthly salary as soon as you sign your first contract - employment or civil service. Your contributions to the supplementary statutory pension are paid into a universal pension fund of your choice. The contribution rate for the universal pension fund for 2024 is 5% of the person's insurance income, divided in a ratio of 2.8% for the employer to 2.2% for the employee. The amount of the contribution is determined each year by the Social Security Code.

Choice of pension company

It is important to know that if you do not choose your own pension company to manage your second pension funds within three months of starting your first job, you will be automatically allocated by the National Revenue Agency (NRA) to one of the supplementary pension companies. When you choose to have 5% of your insurance income paid into a universal pension fund of your choice, the contributions made will go into your personal account and will be invested according to certain standards and rules in order to generate a return over the long term. It is important to choose a pension company that will manage your money responsibly and professionally in the years leading up to retirement.

You have the option of transferring the accumulated funds from your individual account to another pension fund if 1 year has passed since your participation began (from the last change of participation, from the conclusion of the first insurance contract, from the service allocation, or from the resumption of insurance in the PFP under Article 124a of the SSC).

Persons born after 31 December 1959 who are insured in a universal pension fund may change their insurance by directing their contributions to the State Pension Fund (respectively to the Pension Fund for persons referred to in Article 69*). The change from the insurance in the UPRF to the insurance in the Pension Fund, respectively the Fund "Pensions for persons under Article 69" of the CSR*, and vice versa, may be made repeatedly, but after the expiry of at least 1 year from the last change of insurance.

Funds transferred to the Silver Fund do not carry any additional yield and cannot be inherited during the period of stay in the Silver Fund. During this period, the contributions to the UIF are not paid into the individual's social security account but into the Pension Fund of the State Social Security. The Universal Fund page tells you more about the change of insurance from the Universal Pension Fund to the Pension Fund of the State Social Security, and vice versa.

In order to have a good standard of living and a secure financial future, it is important to take out a voluntary pension fund alongside compulsory insurance. Supplementary voluntary pension insurance enables long-term savings, taking advantage of the benefits of capital management, in order to accumulate income and supplement the pension paid after retirement by the state social insurance and the universal pension fund. It is entirely voluntary in terms of whether and how much to provide. In all cases, you can benefit from a tax deduction for the contributions made of up to 10% of your annual taxable amount. Funds paid back from the voluntary pension fund after you become entitled to a pension, regardless of the method of payment you choose, are not taxable.