Buying into the pension fund: How to optimize your retirement provision and taxes

By making voluntary payments into the second pillar, you can increase your retirement assets in a targeted manner and close pension gaps. You also benefit from an attractive tax advantage: The amounts paid in can be deducted in full from your taxable income, which significantly reduces your tax burden. Depending on the canton and individual situation, the savings can be considerable. 

One example: A deposit of CHF 10,000 at a tax rate of 20% results in tax savings of around CHF 2,000.

Calculate pension gaps

Pension gaps: How are they created?

Buying into the pension fund is always possible if there is a gap in contributions – for example as a result of salary increases, career breaks, part-time work or periods spent abroad. The gap results from the difference between the retirement assets currently saved and the maximum possible assets that you could have achieved to date based on your current salary and pension plan.

You will find the maximum possible purchase amount on your pension fund certificate. The pension fund requires additional information to ensure that all legal requirements are met. The following factors, for example, can be taken into account in determining the purchase amount:

• A previous advance withdrawal for home ownership must be repaid in full before a purchase is possible again.
• Existing assets from the second pillar are deducted from the maximum possible purchase amount.
• If, as a self-employed person, you have paid more into the third pillar in the past than would be permissible for employees, this amount will also be taken into account.

A statutory blocking period of three years applies after a purchase in the pension fund. Within this period, the benefits resulting from the purchase may not be drawn in the form of a lump sum (Art. 79b para. 3 BVG). This regulation ensures that the purchase actually serves long-term retirement provision and is not used for short-term tax optimization.

Buying into the pension fund requires careful planning if you are to exploit the full potential. In addition to the amount you pay in, the right timing and your individual life situation play an important role. A strategic approach helps you to make the most of tax advantages and strengthen your retirement provision in the long term.

1. Staggered payments: Spread the payments over several years to make the most of the progressiveness of tax.
2. Age: Ideally, you should make purchases in the years before retirement, taking into account the block on any lump-sum withdrawal – your income is often highest during this phase, and you benefit in particular from the tax savings.
3. Alignment with pillar 3a: Coordinate payments into the pension fund with payments into pillar 3a to optimize your retirement provision and tax savings.
4. Stability of the pension fund: Find out about the financial situation of your pension fund on a regular basis – for example, by looking at the interest earned on retirement assets in recent years.

The decision between buying into the pension fund and topping up pillar 3a depends on your individual goals and financial situation:

• Short-term vs. long-term goals: If you want to remain flexible in the short term, pillar 3a may be more suitable. Buying into the pension fund offers more security for long-term retirement provision goals.
• Maximizing tax benefits: Both options offer tax advantages. A combination of both can help to optimally reduce the tax burden.