{"id":112656,"date":"2026-04-15T19:26:11","date_gmt":"2026-04-15T19:26:11","guid":{"rendered":"https:\/\/elvprojektai.lt\/uncategorized\/termination-of-tier-2-pensions-from-2026-what-employees-employers-and-accountants-need-to-know\/"},"modified":"2026-04-17T19:00:33","modified_gmt":"2026-04-17T19:00:33","slug":"termination-of-tier-2-pensions-from-2026-what-employees-employers-and-accountants-need-to-know","status":"publish","type":"naujienos","link":"https:\/\/elvprojektai.lt\/en\/news\/termination-of-tier-2-pensions-from-2026-what-employees-employers-and-accountants-need-to-know\/","title":{"rendered":"Termination of Tier 2 pensions from 2026 &#8211; what employees, employers and accountants need to know"},"content":{"rendered":"\n<p>The possibility to terminate a pension in Pillar 2 with effect from 1 January 2026 changes the existing pension scheme arrangements and creates a new administrative process that employees, employers and accountants have to deal with in practice.<br\/>Although termination of a Pillar 2 pension is a right of the employee, its implementation is a phased process and has some practicalities that are important to understand in advance.  <\/p>\n\n<h2 class=\"wp-block-heading\"><strong>What is the termination of a Tier 2 pension and what changes from 2026<\/strong>?<\/h2>\n\n<p>Termination of the second pillar of the pension means the employee&#8217;s decision to opt out of further pension provision in pillar 2. From 2026, this option becomes explicitly regulated, but the process itself is not instantaneous &#8211; it involves a period of assessment and administrative steps related to the accounting by Sodros. <\/p>\n\n<p>It is important to understand that Tier 2 pensions and their termination have a direct impact on both the employee&#8217;s salary and the employer&#8217;s tax calculations.<\/p>\n\n<h2 class=\"wp-block-heading\"><strong>How does the termination of a tier 2 pension at the initiative of the employee work<\/strong>?<\/h2>\n\n<p>A typical situation is as follows: an employee applies to terminate his\/her Tier 2 pension at the beginning of the year.<br\/>However, the decision does not take effect immediately, but is only assessed and approved after the end of the first quarter of the year.<\/p>\n\n<p>For this reason, the accounting systems still apply the current pension tier 2 rate of 3% in January, February and March.<\/p>\n\n<h2 class=\"wp-block-heading\"><strong>Why doesn&#8217;t the termination of a Tier 2 pension take effect immediately<\/strong>?<\/h2>\n\n<p>Until the decision to discontinue the pension accrual in Tier 2 is finalised, the employer&#8217;s accounting department calculates, deducts and transfers the contributions to Sodra on the basis of the data in force at that time.<br\/>This means that the second tier is technically still considered active, even if the worker has already applied.<\/p>\n\n<h2 class=\"wp-block-heading\">&#8220;<strong>Sodra and termination of Tier 2 pension &#8211; how are recalculations done<\/strong>?<\/h2>\n\n<p>At the end of the quarter and after the termination of the Tier 2 pension is confirmed, Sodra recalculates the contributions retroactively from January.<br\/>In this case, it is found that some of the Tier 2 pension contributions have been overpaid, so the overpayments are returned to the employer.<\/p>\n\n<p>This creates additional steps for the accounting department: recalculating wages for previous months, adjusting tax returns and paying out any differences to employees. For employees, this may result in a change in wages for previous periods. <\/p>\n\n<h2 class=\"wp-block-heading\"><strong>How can I avoid salary recalculation when I stop contributing to my Tier 2 pension<\/strong>?<\/h2>\n\n<p>In practice, it is possible to avoid these recalculations. If the employee submits a request for the termination of the Tier 2 pension and also submits a request for the suspension of the Tier 2 pension contributions, the scheme may apply a 0% rate from the beginning of the following month. <\/p>\n\n<p>In this case, the January contribution is still payable, but from February onwards, the Tier 2 accrual is no longer calculated, so there is no need to adjust payroll and tax returns.<\/p>\n\n<h2 class=\"wp-block-heading\"><strong>Suspension of Tier 2 pension &#8211; why is it important to make an additional request<\/strong>?<\/h2>\n\n<p>Suspending the Tier 2 pension is a practical solution to reduce the administrative burden. Although the termination of the second pillar pension itself is subject to final approval at a later stage, the suspension of contributions can immediately ensure that the employee&#8217;s salary is calculated correctly. <\/p>\n\n<h2 class=\"wp-block-heading\"><strong>What is important for employers and accountants to know about the termination of a Tier 2 pension<\/strong>?<\/h2>\n\n<p>It is essential for employers to clearly inform employees that if they decide to terminate their pension in Pillar 2, they must submit two separate requests &#8211; one for termination and one for suspension of contributions.<br\/>This solution allows for a smooth administration of the termination of the Pillar 2 pension, avoids accounting errors and reduces the additional workload for the accounting staff.<\/p>\n\n<p><\/p>\n\n<p><a href=\"https:\/\/elvprojektai.lt\/buhalterines-paslaugos\/\">Accounting services<\/a> in Kaunas and throughout Lithuania, as well as other related questions or answers by phone <a href=\"tel:+37061228888\">+37061228888<\/a> or by e-mail <a href=\"mailto:info@elvprojektai.lt\">info@elvprojektai.lt.<\/a> <\/p>\n\n<p>Our team is ready to help.<\/p>\n","protected":false},"featured_media":112141,"parent":0,"template":"","meta":{"_acf_changed":false},"class_list":["post-112656","naujienos","type-naujienos","status-publish","has-post-thumbnail","hentry","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - 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