Voluntary purchasing of pension benefits can be worthwhile. It will be possible for you to increase your retirement capital assets as well as reduce taxes.
You must make voluntary contributions to the Pension Fund before December 1 in order for them to be considered for the current year. Each fall you will be sent a letter on your insurance portal MyPension containing your personal purchasing potential. The maximum amount of additional benefits you may purchase is also listed on your personal insurance certificate.
You may be able to purchase additional benefits in the Pension Fund for various reasons. For example, salary adjustments, a change in the level of your employment, or a reduction in your retirement savings capital due to divorce or an advance withdrawal under the promotion of the home ownership program (WEF) are factors that may influence your potential to purchase additional benefits.
The Pension Plan of the Pension Fund of Credit Suisse Group (Switzerland) consists of the pension capital savings and retirement capital savings pension pots. You may decide whether to purchase additional benefits in the pension capital savings or the retirement capital savings pot.
Pension Capital Savings
If your pensionable base salary along with the award amounts to CHF 99,540 or less, you are insured in pension capital savings. If you make deposits into the pension capital pension pot, it raises your retirement savings capital and thus your retirement pension.
You can make deposits into the pension capital supplementary account to prefinance a bridging pension in order to compensate a pension reduction due to early retirement. The maximum possible purchasing potential will depend on the age at which you wish to retire.
It only makes sense to make a purchase into the supplementary account if you actually take an early retirement. If you do not retire at the Age that you have prefinanced, you risk losing part of your purchase benefits.
You can only make purchases in the supplementary account if your purchasing potential in the pension capital pension pot has been exhausted.
Retirement Capital Savings
If your pensionable salary along with the award amounts to more than CHF 99,540, you are additionally covered in retirement capital savings. Assets in the capital-accumulating pension pots are paid out exclusively as a lump sum when you retire.
If you make purchases in the retirement capital supplementary account, in the event of early retirement you may purchase the assets that you would have saved by the age of 65. The same conditions apply as those for purchasing into the pension capital supplementary account.
As a rule, purchases into the Pension Fund can be deducted from taxable income. However, the decision of the tax authority is always the deciding factor. After purchasing, no lump-sum withdrawal should be made within a time period of three years. If you fail to adhere to this deadline, the tax authority can retroactively disallow the tax deductibility of your purchase.
Lump-sum payouts include:
- Advance withdrawal under the promotion of home ownership program (WEF)
- Voluntary lump-sum payout upon retirement or lump-sum payout as provided in the Regulations
- Cash payment due to taking up self-employment or emigration
The blocking period does not affect:
- Lump-sum payouts in the case of disability or 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.
- 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.
- A maximum of four deposits can be made into the Pension Fund per calendar year.