Payout of pension fund assets. When and how is early withdrawal possible?
Under certain circumstances, the money you have saved in your pension fund can be withdrawn early. Which requirements apply, and how should you go about requesting a withdrawal?
Pension fund assets can be withdrawn early in the following four situations
As a basic principle, the purpose of your pension fund assets is to provide you with financial security in old age. You can withdraw the assets before reaching statutory retirement age if certain requirements are met. You can withdraw the assets early if you:
- Purchase owner-occupied residential property
- Become self-employed
- Take early retirement
Purchase of residential property
If you wish to purchase residential property, you can use the money you have saved in a second-pillar fund.
- An indication of the amount which can be withdrawn to purchase residential property can be found on your pension fund statement.
- Early withdrawals of this kind can only be carried out once every five years, and at least CHF 20,000 must be withdrawn.
- The retirement capital may be used in its entirety until you reach the age of 50. The amount reduces thereafter.
- Married persons must obtain written consent from their spouse. If the residential property is resold, the money which has been withdrawn early must generally be paid back in.
Unlike employees, those who are self-employed are not subject to the mandatory second-pillar pension requirements. Early withdrawals up to the full amount of the pension fund assets can therefore be requested.
- The request must be submitted no later than one year after you become self-employed, since otherwise the assets will be transferred to a vested benefits institution.
- Confirmation from the AHV compensation office must be forwarded to the pension fund.
- Married persons must obtain written consent from their spouse.
- If you are self-employed but operate as a limited liability company (GmbH) or a joint-stock company (AG), early withdrawals are not permitted since you are considered by law to be an employee of the company, and you are still subject to the statutory BVG insurance regulations.
If you are planning to move abroad on a permanent basis, you can request an early withdrawal of the money you have saved in your pension fund.
- If you are migrating to an EU/EFTA state, only the extra-mandatory assets can be paid out. Under these circumstances, the remaining mandatory assets will be transferred to a vested benefits account held by a bank or a vested benefits policy operated by an insurance company, and only paid out upon retirement.
- Your last employer's pension fund or the vested benefits institution will require a recent confirmation of departure from a Swiss municipality for the payout.
If you take early retirement, you have the option of withdrawing part or all of your pension fund assets instead of receiving a pension.
- The minimum early retirement age set by most pension funds is 58.
- If your money is being held by a vested benefits institution, it cannot be paid out any earlier than five years before you reach the statutory AHV retirement age.
- Not every pension fund allows you to withdraw all of the assets you have saved in the form of capital. For the past few years, however, all pension funds have been obliged to allow a capital withdrawal of at least 25% of the mandatory retirement assets.
- The deadlines for requesting a payout vary between several days and three years, depending on the applicable rules.
- Non-employed persons remain liable for AHV contributions until they reach the statutory AHV retirement age. Depending on the assets held, the annual AHV contributions may be higher than employment-related deductions.
- Early retirement always involves financial trade-offs.