The reform was signed in June 2025 after the Seimas voted 88 in favor, 19 against, and 5 abstentions. Automatic enrollment is gone from January 1, 2026, and the old system where anyone who did not actively opt out was quietly enrolled every three years, has been scrapped. Participants who want to exit get two years to withdraw their own contributions and any investment returns, with a 3 percent tax on amounts pulled out before retirement age. State contributions from Sodra do not come back as cash. Those get converted into first pillar accounting units and stay in the state system. People with between 5400 and 10800 euros accumulated can withdraw everything tax free, but only during the window. Applications get collected quarterly, and payments go out within the first two weeks of the following quarter, so the first real wave hit accounts in April 2026, and the second is landing roughly now.

Estonia did essentially the same reform four years ago, and the results are on the public record. When the Estonian window opened in September 2021, one in five contributors walked out on the first day. They took 1.1 billion euros with them in a single month, close to 5 percent of Estonian GDP, landing in household bank accounts almost overnight. Jaanika Meriküll, an economist at the Bank of Estonia, has spent the years since then tracking where the money went, and her findings are probably the single most useful data point anyone in Lithuania has to work with right now. Around 30 percent of the withdrawn funds went toward paying down consumer loans, with about 250 million euros of consumer debt cleared off Estonian household balance sheets in the months after the payout. Another substantial chunk went to pure consumption, enough that quarterly inflation in Estonia ran 1 to 2 percentage points higher than it otherwise would have for a sustained period. That part is what most policy people expected.

What surprised Meriküll was the rest. More than half of the withdrawn money was still sitting in bank deposits a year later, earning deposit rates in the low single digits while the pension funds those savers had exited were continuing to compound at higher rates. Meriküll told Estonian public broadcaster ERR that the money had not been put to use, that it had essentially moved from pension funds into places where it earned less than it would have in the funds. A separate Estonian study using account level data from LHV clients aged 18 to 35 found that younger withdrawers did spend their money rather than park it. Consumption rose sharply in the first two months after the payout, while the amounts reinvested elsewhere came out as marginal. Within roughly six months, the financial situation of the young withdrawers, according to the authors, did not look meaningfully different from the people who had stayed in the system.

Lithuania is now walking into the same distribution of outcomes with slightly different incentive numbers. Estonia had a 4 percent state top up on second pillar contributions, but still around 20 percent of contributors withdrew in the first wave. Lithuania has a 1.5 percent top up, worth about 33 euros a month in 2026, which is a meaningful weaker reason to stay in. Tadas Gudaitis, chair of the Lithuanian Investment and Pension Funds Association, has been warning since last summer that a mass withdrawal without qualifying reasons would deliver a short term boost to consumption. After that, he argues, comes long term pressure on public finances and lower replacement rates in retirement. The Bank of Lithuania's own ex ante modeling, done before the window opened, estimated that roughly 20 percent of accumulated funds would leave in the first half of 2026 alone. That implies about 1.22 billion euros flowing into consumption and a noticeable but temporary bump to GDP. Jokūbas Markevičius, who runs the financial stability department at the central bank, summed it up bluntly at the end of 2025. This increase in consumption will, in the short term, cause higher inflation and economic fluctuations, he said, but over a 2 to 3 year horizon, there will essentially be no positive impact on the economy.

The software developer in Vilnius is not going to read any of that research, and he is not the only one. A financial analyst at Kreditai.INFO who has been fielding questions about the window since last autumn says the most useful thing to tell people is to stop treating the decision as binary. When I talk to someone who is about to withdraw 15000 or 20000 euros and put it in a savings account because the fund feels risky, I know they are paying real money for a feeling, he said. Usually, they have not done the math on what a few percentage points of return compound to over twenty years. The clearest cases for withdrawing, in his experience, are people sitting on consumer loans at 10 or 12 percent. Those borrowers can roughly zero out the debt with their pension money and still come out ahead after the 3 percent withdrawal tax. That matches the Estonian 30 percent cohort almost exactly. The murkier cases are people who want the money as a down payment on a first apartment. That can make sense depending on the property cycle, but it is not automatically a better use of the capital than leaving it invested for another fifteen or twenty years.

Laura Žukovė, a financing specialist at Luminor, has been telling clients the withdrawal question should be driven by what they actually plan to do with the money, not by a general feeling about the pension system. Her point, which lines up with what the Estonian data eventually showed, is that moving 17000 euros from a pension fund to a current account so it can sit there unused for a year is not a neutral decision. Deposit rates in Lithuania in early 2026 are running well below the long run returns of balanced pension funds, and the gap compounds quietly over the years if a person is not paying attention. The part almost nobody is calculating is that refusing to decide counts as deciding to stay in. Q1 applicants have already been paid out. Q2 applicants are being paid now. There will be six more quarterly waves before the window closes on December 31, 2027. Every wave that passes without a decision is another quarter of compounding inside the fund that the software developer in Vilnius is either going to benefit from or walk away from.