Advance withdrawal
Advance withdrawal of Pillar 2 assets
Making your dream of owning your own home a reality requires some planning, also in terms of financing.
A question of planning
Advance withdrawal is possible, but not always, not unlimited, and not without consequences for your retirement pension.
Minimum amount
It is not possible to make an advance withdrawal of less than CHF 20,000 under the home ownership promotion program. Exception: This minimum amount does not apply to the purchase of shares in a housing co-operative or similar ownership stakes.
Maximum amount
The maximum amount that a pension fund can pay out is the full amount of your vested benefits – provided that you apply for the advance withdrawal before you turn 50. If you take advantage of the home ownership promotion scheme at some later stage, the following maximum amounts will apply:
-The vested benefits at age 50.
-Half of the vested benefits at the time of the withdrawal.
You can generally find the current value of your vested benefits on your pension fund certificate (also referred to as a personal certificate or pension certificate).
On request and if you present the required documentation, the pension fund will pay the amount directly to your creditor (e.g. seller, lender, construction company).
Implications of advance withdrawal
Advance withdrawal also has a down side:
-A reduction in future retirement pensions.
-Reduced benefits on disability or death.
-Higher taxes – the pension fund will automatically inform the Swiss Federal Tax Administration of the advance withdrawal within 30 days. The capital that you have withdrawn in advance must be declared as a lump-sum payment from you retirement assets.
Sales restrictions in the land register: If you buy your own home with the help of an advance withdrawal, a restriction is entered in the land register. If you sell your home at some later stage, the advance withdrawal has to be repaid to the occupational benefits institution.
Adjustments in benefits for advance withdrawal
Protect yourself against reduced benefits on disability or death by taking out supplementary insurance. Simply ask one of our pension advisors.
How it works
An advance withdrawal is possible every five years until three years before regular retirement. But you need to be careful. Have you purchased any contribution years from your pension fund within the last three years? If so, you cannot withdraw the amount from your pension plan for three years from the date when you purchased contribution years.
You can simply send a written request to your pension fund if:
-You are planning an advance withdrawal for the first time.
-Your last advance withdrawal took place more than five years ago.
-Your last purchase of contribution years was more than three years ago.
With your request and the other required documents (e.g. a valid purchase contract, building permit or extract from the land register) you confirm to the pension fund that you meet the conditions for an advance withdrawal.
Are you married? If so, you require the written consent of your spouse.