Grant of compensation
Loss subject to compensation
Loss caused to the unit-holders of a mandatory pension fund for which the unit-holders have not been compensated by the pension management company by the due date established by the Supervision Authority shall be compensated for out of the Pension Protection Sectoral Fund under the conditions and pursuant to the procedure provided for in the Guarantee Fund Act.
For the purposes of the Guarantee Fund Act, loss is the loss provided for in subsection 32 (1) and (2) of the Funded Pensions Act according to which the Supervision Authority ascertains that there has been a violation of the requirements provided by legislation or the pension fund rules which has caused loss to the unit-holders of the pension fund.
The size of the loss shall be determined on the basis of all the proprietary damage caused, including any loss of profit compared to the situation where such violation would not have occurred and where the assets of the pension fund associated with the violation would have been invested similarly to the other assets of the pension fund.
Date of compensation for loss and grant of compensation
The obligation of the Fund to compensate, under the conditions and pursuant to the procedure provided for in the Guarantee Fund Act, for any loss caused to unit-holders arises ten working days after expiry of the term specified in a precept of the Supervision Authority, if the pension management company fails to comply with a precept.
Immediately upon expiry of the term specified in a precept to the pension management company, the Supervision Authority shall send a notice to the Fund and to the registrar of the Estonian Central Register of Securities (hereinafter registrar) setting out information regarding the following:
- the pension management company which caused the loss;
- the pension management companies or depositaries managing the pension funds the unit-holders of which suffered loss;
- the other circumstances.
The Fund shall determine the amount of compensation to be paid to each person on the basis of the information submitted by the Supervision Authority, pension management company, registrar and other persons, pursuant to the provisions of the Guarantee Fund Act.
Level of compensation
Pensionikaitse osafondi arvel hüvitatakse Tagatisfondi seaduses sätestatud tingimustel ja korras kohustusliku pensionifondi osakuomanikele tekitatud kahju, mida pensionifondivalitseja ei ole Finantsinspektsiooni määratud tähtajaks osakuomanikule hüvitanud.
A unit-holder shall be compensated in full for loss subject to compensation out of the Sectoral Fund in the amount of up to 10 000 euro per specific loss event of the unit-holder. Any loss exceeding 10 000 euro per specific loss event of a unit-holder shall be compensated for to the extent of 90 per cent.
The registrar shall, for the amount of compensation granted to a unit-holder, acquire for the unit-holder the maximum whole number of units of the pension fund to which the unit-holder makes mandatory funded pension contributions at the time of payment of the compensation.
If a unit-holder has entered into an insurance contract for a mandatory funded pension or if the unit-holder is dead, units shall be acquired for him or her from the existing pension fund of which he or she last acquired units. If all the pension funds of which the unit-holder has acquired units have been liquidated, the units of the pension fund indicated by the unit-holder or his or her successor shall be acquired for the compensation.
Upon acquisition of units, the issue fee shall not be charged.
Other sources for compensation
If the assets of the Pension Protection Sectoral Fund are not sufficient to preform the obligations of the sectoral fund, the Fund may, on the basis of a resolution of the supervisory board:
- take loans from credit institutions or other persons;
- perform the obligations of the sectoral fund out of another sectoral fund;
- apply for a state loan ar a state guarantee for a loan taken by the Fund.
Right of claim
Upon payment of compensation to unit holders of manadatory pension funds and other entitled persons, the right of claim against a fund participant shall transfer from such persons to the Fund to the extent of the amount paid.
The claims of entitled persons against a fund participant which have not been compensated for by the Fund shall be satisfied pursuant to the Bankruptcy Act and other Acts.
If the Fund fails to compensate an entitled person for loss within the period prescribed in this section, the person has the right to file a claim against the Fund. The limitation period for filing a claim shall be five years.