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Step 3: Should I Opt for an Annuity or
a Lump Sum?
The decision as to whether you wish to receive an annuity when you retire or whether a lump-sum payment makes more sense should be made in good time.
In terms of occupational benefits, most people opt for an annuity from their pension fund. Following the BVG/LPP revision, an insured can now choose to receive a lump-sum payment of at least one-quarter of the accrued retirement assets. Each pension fund is free to decide whether to pay out a larger proportion. Generally speaking, anyone who wishes to receive a lump-sum payment must notify their pension fund three years before they retire. For more details, refer to the regulations of your pension fund.
A Decision with Consequences
When deciding whether to opt for an annuity, a lump-sum payment or a combination of the two, you must consider your family circumstances, state of health and financial situation. Each option has its pros and cons.
Pension Payments or Lump-Sum?
As a rule of thumb, if you have pension fund assets of CHF 500,000 or more, you should definitely consider a (partial) lump-sum payment.
We hope this has explained in which situations you can benefit from a lump-sum payment or an annuity. Our pension advisors will be happy to help you make the right decision for you. Why not get in touch with us ?
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