Payment

On the date of retirement, you become entitled to a pension annuity.

Your employer or you yourself send Modra a notice of retirement.

After retirement, or after the end of the month in which the last premium was paid into your pension account, Modra informs you of the possible ways of drawing your savings by sending you informative annuity calculations from which you may choose - the amount of the annuity depends on the amount you have saved.

You choose the annuity that fits your plans and submit proof of retirement.

After receiving your decision (you return the informative calculation with the selected annuity marked), we send you an offer with the final annuity amount for signature in the following month. Please return the offer as soon as possible.

In the month following receipt of the signed offer, you receive the annuity policy, and the first annuity payment is made on the 10th working day of the month.

A pension annuity is regular income paid from your savings and received for the rest of your life.

If you do not yet need the annuity at retirement, you may leave your savings in the pension fund, where they continue to earn the achieved return or at least the guaranteed return on a monthly basis. You may decide to start annuity payments at any later time. Once you notify us, we prepare everything necessary to start the payout.

If you have saved in supplementary pension insurance funds with different providers, you may combine all of your savings and choose at Modra a pension annuity calculated on the basis of all accumulated assets. To transfer funds, complete and sign the transfer request and send it to us. We will take care of all the remaining procedures.

The amount of the annuity depends on the amount of accumulated assets, your age at the start of payout, the technical interest rate applied, annuity mortality tables and payout costs. The calculation also takes account of specific conditions depending on the type of contributions (individual contributions, employer contributions under ZPIZ-1 or ZPIZ-2) and the type of annuity selected. You may choose between annuities with or without a guaranteed payout period (inheritability), as well as accelerated annuity payment options.

You receive the selected annuity for the rest of your life. The technical interest rate taken into account when determining the annuity is guaranteed and cannot be reduced during the payout period. If returns exceed the guaranteed return, 90% of the excess return for the individual year belongs to the insured persons in the form of a permanent annuity increase (profit allocation). This means that in future years your annuity may only be higher than the first annuity paid (an increasing annuity) and will under no circumstances be reduced.

You will receive the pension annuity for the rest of your life.

You may choose from different types of annuities, including those with a guaranteed payout period (inheritability) or without one, and accelerated payout options. The selected annuity type affects the dynamics and amount of payments.

Choosing an annuity with a guaranteed payout period means that if the annuity recipient dies before the expiry of the guaranteed payout period, the annuity is paid to the beneficiaries or heirs until the end of that period.

You choose the number of guaranteed years yourself when the annuity contract is concluded. The selected guarantee period affects the amount of the annuity. The guaranteed period may last from 1 to 20 years.

Accelerated annuity options also include a guaranteed payout period for the duration of the accelerated payout period. If the annuity recipient survives the selected guaranteed or accelerated period, the annuity continues to be paid for the rest of their life.

Choosing an annuity with an accelerated payout period means that, in the initial period, you receive the majority of the accumulated assets, so the annuity amount is higher during that period. After the accelerated period ends, you then receive a lower amount for the rest of your life.

You choose the number of years in the accelerated payout period yourself when concluding the annuity insurance. The accelerated period may last from 1 to 20 years. During that period, the annuity also includes death benefit protection (a guaranteed payout period).

The selected length of the accelerated period affects the amount of the annuity.

Yes, if you have chosen an annuity with a guaranteed payout period or an accelerated payout option. In that case, the annuity is inheritable during the selected guaranteed or accelerated period. If the annuity recipient dies, we pay the annuity until the end of that period to the beneficiary designated by the annuity recipient, or to the heir if no beneficiary was designated.

No, if you have chosen an annuity without inheritability.

You designate beneficiaries in the event of death when concluding the annuity insurance and may change them at any time later by submitting a new beneficiary designation form to Modra Insurance Company.

If the annuity recipient survives the selected guaranteed or accelerated period, we continue paying the annuity until the end of their life.

Yes. All annuities are taxed, but not in full. Only one half of the annuity paid is taxable; the other half is not included in the retiree's personal income tax base. Whether advance income tax is withheld at the time of payment depends on the amount of the annuity.

For an individual annuity payment of less than EUR 160, no advance income tax is withheld. For annuities above EUR 160, we withhold advance income tax on each payment at a rate of 25% of one half of the annuity amount.

The annual personal income tax liability is assessed by FURS (Financial Administration of the RS) by decision for the individual calendar year (the informative tax calculation sent, which is deemed to be the tax assessment decision after the objection period expires), taking into account all receipts and the advance tax already paid during the year.

If the annuity recipient considers that, given their other income, the advance income tax is too high, they may claim a reduced advance income tax rate of 16%. The form for claiming the reduced advance rate must be submitted each year to FURS and to Modra Insurance Company.

No. Reporting to FURS is Modra's responsibility.

By the end of January each year, Modra sends recipients of payments a summary statement of receipts paid in the previous calendar year. It also notifies FURS of the payments and of the advance income tax withheld. When you receive the informative income tax calculation, you therefore only need to verify that all data match and that the annual tax assessment is correct.

Payment of accumulated assets in a lump sum is possible under the following conditions:

• upon retirement, if you have accumulated less than EUR 12,000 through your employer's contributions;
• at any time for all assets that you have accumulated yourself through your own contributions.

If you are employed in the private sector, you may also request a lump-sum payment for assets accumulated through employer contributions paid up to 31 December 2012, provided that at least 10 years have elapsed since your inclusion in supplementary pension insurance.

If you were employed in the public sector, you may request a lump-sum payment provided that, by 31 December 2016, 10 years had already elapsed since your inclusion in the pension fund and that on that date you no longer had the status of a public employee.

A lump-sum payout of savings (including in the event of the saver’s death) constitutes an extraordinary termination of saving and, as such, is not aligned with the purpose and tax incentives of supplementary pension insurance.

When accumulated assets are paid out in a lump sum, Modra withholds advance income tax at a rate of 25%. In payouts to beneficiaries/heirs, this is also the final tax liability.

In the case of a lump-sum payout, the annual income tax liability is assessed by FURS - Financial Administration of the RS (the informative tax calculation sent, which is deemed to be the tax assessment decision after the objection period expires), taking into account all receipts and the advance income tax already paid during the year - the annual income tax settlement.

A lump-sum payout may also temporarily affect the amount of certain social transfers (reduced kindergarten fees, child benefits, etc.), so we recommend that you familiarise yourself with all possible tax consequences before making a decision.

If you opt for a lump-sum payout before 10 years have elapsed since the start of saving in the pension fund, an additional 8.5% insurance transaction tax is also withheld on payout.

In addition to the taxation described above, in the event of extraordinary termination of saving, Modra also charges exit costs of up to 1% of the redemption value of the assets.