I was told that they would withhold tax from the lump sum payment of pension savings, is this true and what is its size?
Yes, the tax legislation provides for the withholding of income tax in case of early withdrawal of pension savings in order to improve housing conditions and (or) pay for treatment. Pension contributions upon receipt to the individual pension account of the contributor are not subject to individual income tax (IIT). Therefore, pension savings are subject to taxation upon payment.
However, when receiving a lump-sum pension payment, the contributor is given the right to choose - the IIT can be paid at a time or with a delay - monthly in equal installments for no more than sixteen years upon retirement (according to the schedule for pension payments established by the UAPF).
If the depositor decides to pay the IIT immediately in full, then he must indicate in the application the amount to be withdrawn minus the IIT in the amount of 10%.
Both amounts are already indicated in the statement provided by the UAPF to the depositor, for his convenience and independent decision-making. The amount indicated by the depositor for withdrawal will be transferred from the UAPF to his special account opened with an authorized operator.