Purchase of Pension Benefits
In the next few days, you will receive a letter with a payment slip that shows the maximum benefits you may purchase under the various pension pots of the Pension Fund.
Purchasing Options for Pension Capital Savings
If your pensionable base salary together with the cash portion of your Award is up to CHF 98,700, you are insured under the pension capital savings (pension capital and pension capital supplementary account pension pots). If you are eligible to purchase additional benefits, you will receive an overview of your individual purchasing options.
Payments into pension capital savings increase your retirement savings capital and thus your retirement pension, but have no effect on the amount of disability pension. In the new pension model, this is based on your pensionable salary in the Pension Fund. Under the new model, the level of your retirement pension, irrespective of the accrued retirement savings capital and any personal payments into the Pension Fund, no longer affect the amount available for the disability pension, nor do any advance withdrawals under the promotion of home ownership or transfers due to divorce.
Purchasing Options for Retirement Capital Savings
If your pensionable salary together with the pensionable cash portion of the Award exceeds CHF 98,700, you are also insured under the retirement capital savings (retirement capital and retirement capital supplementary account pension pots). Assets in the capital-accumulating pension pots are paid out exclusively as a lump sum when you retire. If you are eligible to purchase additional benefits, you will receive an overview of your individual purchasing options.
Tax Considerations
Purchases of pension benefits are usually deductible from your taxable income; however, the tax authority always has the final say on this. Once you have made a purchase, your entire retirement savings capital is subject to a three-year blocking period for lump-sum payouts. If a lump sum is withdrawn within the three-year blocking period, the tax authority can reverse the tax-deductibility of any purchases you or your employer made up to three years before the lump-sum payout. Lump-sum payouts include:
- Advance withdrawal for the promotion of home ownership;
- Voluntary lump-sum payout on retirement, or a lump-sum payout as stipulated by the regulations;
- Cash payments due to the insured becoming self-employed or leaving Switzerland permanently.
The blocking period does not affect:
- Lump-sum payouts in the event of disability;
- Lump-sum payouts in the event of death.
Please also note the following for any purchases:
- Purchases may only be made after repaying any advance withdrawals under the promotion of home ownership.
- You may only make purchases if you have no vested benefits at vested benefit institutions.
- Purchases in the pension capital supplementary account pension pot are only possible if the purchasing potential in the pension capital pension pot has been exhausted.
- Purchases in the retirement capital supplementary account pension pot are only possible if the purchasing potential in the retirement capital pension pot has been exhausted.
- With each payment, the blocking period of three years for lump-sum payouts begins again.
- If you came here from abroad and have never before been a member of a Swiss pension fund, for the first five years after you move here, the maximum amount for which you may purchase benefits in any one year is 20% of your pensionable salary.
- If you were previously self-employed and have funds in Pillar 3a, these can be taken into account when calculating the maximum possible purchase amount.
- You can make a maximum of four payments into the Pension Fund per calendar year.
Payment Terms and Payment Deadline
The letter you receive with the payment slip will contain the account number for payments into the Pension Fund as well as your personal reference number. According to the regulations, the final date for personal purchases by the insured is always December 1. If your payment reaches us after this date, it can no longer be taken into account for the current year and the amount will be returned.
Questions and Contact
Check your individual pension situation on a regular basis, and make the appropriate adjustments, if possible. Your personal advisors at the Pension Fund will be happy to help.