Payout of pension fund assets: Reasons for withdrawing pension fund assets early

Payout of pension fund assets. When is early withdrawal possible and how can you request it?

Which requirements apply for an early withdrawal of pension fund assets, and how should you go about requesting a withdrawal? What insured parties in Switzerland should absolutely know if they wish to make an early pension fund withdrawal.

Withdrawing pension fund assets to purchase residential property

If you wish to purchase residential property, you can use the capital from a second-pillar fund. 

Important information:

  • An indication of the amount which can be withdrawn to purchase residential property can be found on your pension fund statement.
  • Early withdrawals for the financing of residential property can only be carried out once every five years, and at least CHF 20,000 must be withdrawn.
  • The 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 If the residential property is resold, the money which has been withdrawn early must generally be paid back in.
  • By withdrawing money from the pension fund, you can contribute more equity to the purchase of residential property. Consequently, a smaller loan is required from the bank, meaning that the mortgage is smaller and the interest payments are less.
  • Early withdrawal typically results in a second-pillar pension gap. It must be offset by retirement in the form of repayment or another solution. If this pension gap is not covered, the pension may be lower.
  • In the event of death or disability of the insured person as well, there is also a risk that fewer death and disability benefits will be paid out.
  • In the event of death or disability of the insured person as well, there is also a risk that fewer death and disability benefits will be paid out.

Withdrawing capital for self-employment

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 assets can therefore be requested.

Important information:

  • The withdrawal request must be submitted no later than one year after you start self-employment, 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.
  • You can use your assets to grow your company, and you will therefore need to borrow less capital to fund your company's development.
  • Early withdrawals result in a pension gap when you reach retirement age. You will need to find another way of closing this gap before you retire. This will prevent any pension reductions.
  • A tailored insurance product may also need to be purchased to cover the risks of death or disability.

Withdrawing pension fund assets to emigrate from Switzerland

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.

Important information:


  • 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 Swiss employer's pension fund or the vested benefits institution will require a recent confirmation of departure from a Swiss municipality for the payout.

Withdrawing pension fund assets to take early retirement

If you take early retirement, you have the option of withdrawing part or all of your pension fund assets instead of receiving a pension. Following the latest AHV reform, which takes effect on January 1, 2024, all pension funds must allow insured to draw their pension early from the age of 63 at the latest. Furthermore, they must also offer the option of partial retirement. The advantage of partial retirement is that insured can manage their transition from employment to retirement more easily and in stages. Individuals who wish to work beyond the reference age but in the past were unable to defer drawing their pension fund benefits should look at whether it makes sense to rejoin the pension fund.

It is now also possible to draw a partial pension from the first pillar (AHV). The minimum amount of pension that can be drawn early is 20%; the maximum amount is 80%.

However, it should be noted that drawing your pension early results in a lifelong reduction in the amount you receive, although the reduction rates for persons with an annual income of less than CHF 58,800 are likely to fall from 2027 by 40% as a result of the reform. At present, the reduction rates are 6.8% for each year that the pension is drawn early. But they will be reduced from the beginning of 2027 at the earliest. If you plan to retire early shortly before these new rates are introduced, it could therefore be worthwhile deferring your early retirement to take advantage of these lower rates. The Federal Council still has decide what the new rates will be. You can apply to draw your pension at any time from the beginning of the subsequent month.

Women belonging to the transitional generation (born between 1961 and 1969) can already apply for early retirement under the AHV reform from the age of 62 and take advantage of lower reduction rates. If they do so, however, they lose their right to the pension supplement.

Important information:

  • 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 AHV reference age.
  • The deadlines for applying for a withdrawal vary between several days and three years, depending on the applicable pension fund regulations.
  • Non-employed persons remain liable for AHV contributions until they reach the statutory AHV age. Depending on what assets you have, the annual AHV contributions may be higher than employment-related deductions.