Pledging means that the money remains in the Pension Fund but is pledged to the creditor as collateral. It does not reduce your insured pension benefits unless the pledge is realized. In such a case, the consequences are the same as those of an advance withdrawal.
Advantages of Pledging
- No reduction in benefits in the event of retirement or death
- Higher mortgage interest deductible from income subject to tax
- Lower mortgage interest rate, depending on the lender
- No tax implications, as no payment is made
- It is still possible to purchase pension benefits
Disadvantage of Pledging
- No additional equity capital, and thus no reduction in the mortgage burden
Amount of the Pledge
The total pension capital available to you for the promotion of home ownership is shown on your insurance certificate under "Amount available for home ownership." The basic principles are:
- Until the age of 50 you can pledge the whole of your retirement savings capital.
- Thereafter you can pledge up to the amount of capital you had accrued at age 50 or half of your current retirement savings capital, whichever is higher.
- Unlike an advance withdrawal, pledging is not subject to a minimum amount.
The pledge is not valid until the Pension Fund receives written notification to such effect.
If you would like to pledge your retirement savings capital, please contact your lender. If a deed of pledge is concluded between you, we must receive the pledgee's written notification before it can come into force.
Consent of the Pledgee
Pledging blocks either your entitlement to pension benefits or part of your retirement savings capital in favor of the mortgage lender. This represents additional security for the pledgee. As a result, the Pension Fund requires the written consent of your pledgee in the following cases:
- If you leave the Pension Fund and decide to receive a cash payment of your retirement savings capital.
- If you go through a divorce and part of your retirement savings capital has to be transferred to your former spouse's or former registered partner's pension fund.
- If pension benefits become due upon retirement or in the event of your disability or death.
Pledging does not trigger a tax liability. Tax is only due if the pledge is realized, because that means you are withdrawing capital from the Pension Fund.