Pensions in Lithuania: The Three Pillars Explained

Lithuania Builds a Pension Out of Three Separate Things

Most people arriving in Lithuania meet the pension system twice and never connect the two encounters. The first is the line on the payslip that says pensijų draudimas — 8.72% of gross pay, the largest single component of the 19.5% that goes to Sodra. The second is a phone call or a branch conversation about "the second pillar", which sounds like a sales pitch and is, in part, but is also a state scheme with a state contribution attached to it.

They are two different pensions, funded differently, paid differently, and inherited differently. The system has three layers in total:

The first pillar is compulsory and automatic. The second is now voluntary at both ends — you have to ask to join, and you can ask to leave. The third has always been entirely up to you.

The State Pension: A Basic Part and an Earned Part

Sodra's old-age pension is not a percentage of your final salary. It is the sum of two components, and understanding which one your years buy and which one your earnings buy is the whole of it.

The general part is bought with time. It is the basic pension amount, scaled by the fraction of the required record you actually completed. In 2026 the basic pension is €327.91 a month and the required record is 34.5 years. Complete the full record and you get the whole of it; complete half and you get half.

The individual part is bought with earnings. Every year you accumulate pension accounting units — points. Earn exactly 12 times the national average wage over a year and you bank one full point; earn less and you bank a fraction of one; earn more and you bank more, up to a ceiling of 5 points in a single year. In 2026 each point is worth €8.11 a month. Both the basic amount and the point value are indexed every 1 January, so both numbers move.

Sodra's own worked example makes the arithmetic concrete: a person retiring in 2026 with the full 34.5-year record and 19 accumulated points receives €327.91 plus 19 × €8.11, which comes to €482 a month.

That is roughly what a career of average Lithuanian earnings produces, and it is why the average old-age pension in 2026 is about €750 and the average among people who completed the full record is about €810. There is a floor underneath it: from 1 January 2026 the minimum consumption needs level is €468 a month, and a pensioner with the full record whose total pensions fall below it is topped up to that figure.

Retirement Age, and the Record That Decides Whether You Get Anything At All

Lithuania has been raising its pension age since 2012 — two months a year for men, four for women, converging from different starting points. That convergence finishes now: in 2026 the old-age pension age is 65 for men and 65 for women alike. There is no further published rise beyond that point, and no separate schedule left to read: the two tracks that ran from 2012 have met.

The record requirement moves separately, and it is the number that decides whether you qualify:

For a foreigner arriving mid-career this is the sentence that matters most on the page. 15 years is a long time to a newcomer at 45, and the required 34.5 years is longer than most people's remaining working life here. Neither number is as forbidding as it looks, because neither has to be completed in Lithuania — see the section on working in more than one country below.

The Second Pillar: 3% From You, 1.5% From the State

If you join, 3% of the income on which your social insurance contributions are calculated is deducted on top of the 19.5% Sodra takes already, and paid into a fund in your name. On a €2,000 salary that is €60.00 a month — the exact gap our salary calculator shows between a net pay figure with the second pillar switched on and one with it off.

Against that, the state pays a contribution of its own: 1.5% of the national average wage of the year before last, which is a flat cash amount rather than a percentage of your salary. The base wage for 2026 is €2,232.80, so the state contribution is €33.49 a month — up from €30.33 in 2025, and €402 over the year.

Because the state part is flat and your part is proportional, the deal is worth most at the bottom of the wage scale. Sodra's own illustration is someone on the minimum wage of €1,153: their own 3% is €34.59 a month, the state adds €33.49, and €68.08 a month lands in the account. Just under half of it is not their money. At three times that salary the personal contribution triples and the state's does not move.

There is a fourth source of money in the account that most people never use. Contribute more than the standard 3% voluntarily and the extra qualifies for income tax relief of up to €300 a year, recovered through your annual tax return.

What Changed on 1 January 2026, and the Window That Closes at the End of 2027

Two reforms sit on top of each other, and readers routinely mix them up.

The 2019 change: Sodra stopped funding the second pillar

Until 2019, part of the money in second-pillar accounts was not new money at all. It was a transfer out of Sodra — a slice of the state pension contribution diverted into private funds, which reduced the first-pillar entitlement it came from. That transfer ended in 2019. Since then the second pillar has been funded from two sources only: your own 3% and the state's 1.5% contribution.

The consequence is still live, and it is the single most misunderstood thing about leaving the scheme. Money that arrived from Sodra before 2019, and money that arrived as the state contribution, does not belong to you in the way your own contributions do. If you leave, those amounts are not paid out in cash — they are converted into additional Sodra pension accounting units, which raise the individual part of your future state pension instead.

The 2026 change: nobody is enrolled automatically any more

From 1 January 2026 automatic enrolment is abolished. Under the old system people were swept into the scheme periodically and had to opt out; now nothing happens unless you sign a contract with a pension company yourself. The state's role is reduced to inviting people to save and publishing information about the option.

Three other things changed on the same date:

• Contribution pauses became unlimited. You can suspend contributions for 12 months at a time, repeatedly, by asking your pension company. The state contribution pauses too, and the accumulated balance stays invested.
• A withdrawal window opened. Between 1 January 2026 and 31 December 2027, existing participants may leave the second pillar and take out their own contributions plus the investment return on them. Requests are gathered quarterly and paid within 10 working days of the following quarter starting. SEB estimates that a typical long-standing saver gets back something in the order of 60%–70% of the accumulated balance, the rest being the pre-2019 Sodra money and state contributions that convert to pension units rather than cash.
• Early access rules were rewritten. They are set out in the payout section below.

The Six Companies That Run Second-Pillar Funds

Six companies are licensed to run second-pillar funds. Each offers a set of target-date funds — you are placed in the one matching your birth-year cohort, and it moves from equities toward bonds as that cohort approaches retirement — plus an asset-preservation fund for people who want to stop taking risk.

The charges are unusual in that the law, not the market, sets the ceiling. The asset management fee was capped at 0.8% of assets in 2019, 0.65% in 2020, and 0.5% from 2021 onward. Switching from one company to another costs no more than 0.05% of the amount transferred. Across the whole second pillar, the Bank of Lithuania reports an average return of 17% in 2024, with assets under management growing to €9.1 billion.

Allianz Lietuva

Both fee levels published upfront

Target-date fee: 0.5%Preservation fund fee: 0.2%Funds: 8

See the fund pages

Key highlights

Both fee levels publishedTarget-date funds at 0.5% yearlyInsurance company, not a bank subsidiary

Key features

• Publishes both fee levels plainly
• Preservation fund well below the ceiling
• Seven birth-year cohorts covered
• Life insurer, so products sit together

Account details

Target-date fee

0.5%

Preservation fund fee

0.2%

Funds

8

Summary

• Publishes both fee levels plainly
• Preservation fund well below the ceiling
• Seven birth-year cohorts covered
• Life insurer, so products sit together
• Target-date funds at the statutory ceiling
• An insurer, so no current account

Artea

The former INVL book, now inside Artea

Fee ceiling in law: 0.5%Switching cost cap: 0.05%

Key highlights

Sodra lists it as Artea Asset ManagementFee capped at 0.5% a yearSame target-date structure as everyone

Key features

• One of six licensed by Sodra
• Belongs to a Lithuanian retail bank
• Same statutory fee ceiling as everyone
• Results published quarterly by the regulator

Account details

Fee ceiling in law

0.5%

Switching cost cap

0.05%

Summary

• One of six licensed by Sodra
• Belongs to a Lithuanian retail bank
• Same statutory fee ceiling as everyone
• Results published quarterly by the regulator
• Renamed within the last three years
• Smaller bank behind it than Swedbank

Goindex

The newest name on Sodra's list

Fee ceiling in law: 0.5%Switching cost cap: 0.05%

Key highlights

Sodra lists it as Goindex, UABFee capped at 0.5% a yearBank of Lithuania supervises it

Key features

• Licensed on the same terms as banks
• Same fee ceiling, same supervision
• Results in the regulator's quarterly tables
• Independent of any retail bank

Account details

Fee ceiling in law

0.5%

Switching cost cap

0.05%

Summary

• Licensed on the same terms as banks
• Same fee ceiling, same supervision
• Results in the regulator's quarterly tables
• Independent of any retail bank
• Shortest track record in the tables
• No branch network, everything online

Luminor

The pension arm of the Nordic-owned bank

Fee ceiling in law: 0.5%Switching cost cap: 0.05%

Key highlights

Sodra lists it as Luminor investicijų valdymasFee capped at 0.5% a yearIn the second pillar before 2019

Key features

• Among the longest-running managers here
• Backed by a Baltic-wide bank
• Same statutory fee ceiling as everyone
• Balance visible beside your other accounts

Account details

Fee ceiling in law

0.5%

Switching cost cap

0.05%

Summary

• Among the longest-running managers here
• Backed by a Baltic-wide bank
• Same statutory fee ceiling as everyone
• Balance visible beside your other accounts
• Baltic pension books changed hands repeatedly
• Smaller retail presence than Swedbank or SEB

SEB

Run by SEB investicijų valdymas

Fee ceiling in law: 0.5%Switching cost cap: 0.05%

See the fund pages

Key highlights

Sodra lists it as SEB investicijų valdymasMarkets itself on price, not performance2026 reform explained in Lithuanian

Key features

• Clear account of the 2026 reform
• Large branch and online presence
• Same statutory fee ceiling as everyone
• Sits beside an existing SEB relationship

Account details

Fee ceiling in law

0.5%

Switching cost cap

0.05%

Summary

• Clear account of the 2026 reform
• Large branch and online presence
• Same statutory fee ceiling as everyone
• Sits beside an existing SEB relationship
• Claims lowest fee without a number
• Explains the reform in Lithuanian only

Which of the six suits whom. Allianz Lietuva is the one for a saver who wants the fee written down before signing: it runs seven target-date funds plus an asset-preservation fund and publishes both fee levels plainly on its own pension pages, covering birth-year cohorts from the oldest to the youngest. Artea suits someone who already banks there and wants one login — it is the former INVL pension book, now inside the bank that renamed itself from Šiaulių bankas, so older advice names a different company; it has its own branch network, and the Bank of Lithuania publishes its fund results quarterly alongside everyone else's. Goindex is the newest name on Sodra's list and the one to look at if you are comparing an index-led proposition against the banks: independent of any Lithuanian retail bank, licensed on the same terms, and supervised the same way — but with the shortest track record in the regulator's long-run return tables, and everything done online.

Luminor is the pension arm of the Nordic-owned bank, listed by Sodra as Luminor investicijų valdymas, UAB, and it makes most sense for existing Luminor customers consolidating their accounts: it has been in the second pillar since before the 2019 reform and is one of the longest-running managers in the return series, though ownership of the Baltic pension books has changed hands more than once. SEB suits someone who already holds an SEB current account — it publishes a clear account of what the 2026 reform changes for savers, in Lithuanian, and describes its own fee as among the lowest in the market without putting a number beside the claim. Swedbank is the one for an English-speaking newcomer who wants the rules in English first: it sets out the quarterly collection and ten-working-day payment cycle for exits, states the state contribution in cash terms both monthly and annually, and quotes the 0.5% statutory maximum on its own pages rather than its actual charge.

The Bank of Lithuania publishes each fund's results quarterly, including average annual returns over five and ten years, and a separate table of every manager's charges. Those tables are the place to compare two funds against each other; a manager's own marketing is the place to find its contract terms.

Getting the Money Out, and What It Costs

Second-pillar money is not accessible on demand. The rules that took effect on 1 January 2026 draw a hard line at retirement age, and a second line at the size of the pot.

Before retirement age

• A quarter, once in a lifetime. You may take 25% of the accumulated assets, capped at the total of your own contributions, once during the whole accumulation period. Taken before retirement age it carries a 3% deduction, which is paid to the state pension fund rather than kept by anyone.
• A small pot, close to the end. Within five years of retirement age, if the balance is below half the minimum annuity threshold — under €8,392.50 in 2026 — the whole balance can be taken, again with the 3% deduction.
• Health. Loss of 70%–100% of working capacity, a serious illness on the health ministry's list, or established palliative care needs allow the full balance to be taken with no deduction at all.

At retirement age

Payouts themselves are not taxed. The 3% on early withdrawals is a deduction into the state pension fund, not income tax, and it applies only to the early routes above.

The inheritance position is the clearest advantage the second pillar has over the first. Accumulated assets are inheritable: if you die before retirement age the whole balance passes to your heirs. After retirement it depends on the payout form chosen, since an annuity is a lifetime income rather than a fund. Sodra's own old-age pension is not inheritable in that way at all.

If You Have Worked in More Than One Country

This is the part that changes the numbers above for almost every reader of this page, and it is why the 34.5-year record is not the obstacle it appears to be.

Inside the EU, the EEA and Switzerland, insurance periods are aggregated. Years worked in Germany, Poland, Ireland or anywhere else in the coordination area count toward the Lithuanian qualifying record, so someone with eight years in Lithuania and twelve elsewhere has cleared the 15-year minimum. What each country pays, though, is calculated only on the contributions made there: Lithuania pays a Lithuanian pension based on Lithuanian contributions, Germany pays a German one, and both arrive separately. Nothing is transferred between systems and nothing is lost by leaving.

Bilateral agreements cover several countries outside that area. Lithuania has social insurance treaties with Russia, Belarus, Ukraine, Canada and Moldova governing how pensions are paid across the border. If you already draw a pension from one of those countries, the treaty governs whether it continues to be paid to you here.

Work before 1994 needs paperwork. Sodra's own records begin in 1994. Anything earlier — including Soviet-era employment — has to be established with documents presented to a Sodra office, and that is a common reason for an application to stall.

Leaving Lithuania later does not forfeit anything. Contributions cannot be withdrawn as cash when you go, but the record stays on file and the entitlement is preserved. Second-pillar assets are different again: they are your property in a fund, and they stay invested in your name wherever you live.

Frequently Asked Questions