2nd Pillar - choose contribution %

Banks, Insurances & Third Pillar
22

If you will use indirect amortization then the 3-year freeze is not an issue. It only applies to withdrawals.

23

Noted, so pledging would be beneficial, as long as the Tragbarkeit is there. If I understand you correctly, pledging allows me to increase my total loaned value up to 90% and will increase the 2nd tranche from max. 14% to max. 24% (which needs to be amortized). The bank lends me more money, therefore interest and amortization increase (and I’m higher leveraged
:smiley:).

This is not likely the case for us, as we are planning to have children by 2024 so she will work only part time. Our income will be conservatively around 200k/year, depending on career progression and if the bank will factor in bonuses. So yeah, we need to bring in 30% capital, to achieve Tragbarkeit, so pledging is off the table.

So the strategy would be:

  1. withdraw complete 2nd pillar (165k, 12% of total)
  2. bring another 235k in cash (further 17% of total)

End up with 29% Eigenkapital. And don’t touch 3rd pillar.

3 Likes
24

That’s how I would do it. As long as there are no negative side effects in terms of disability insurance etc. with your pension fund. Usually it’s linked to the salary and not to the assets, at least with good pension funds.

@Moustakalis
With most banks this is only true if we talk about collateral outside of your pension fund. So for example: 10% cash and 23.4% pledged 3a account will lead to 0 amortisation requirement.

Main reason: pension fund as collateral is worthless if the person dies and is married or has kids.

25

If at all possible, it might be a good idea to withdraw one of your two second pillars and leave the other untouched. That way, if you want to buy back into the 2nd pillar later and get tax deductions, you can do it in the untouched one. Note that the person must be working at the time when you intend to do a buy back for it to be possible.

1 Like
26

I just made some calculations. Assuming margimal tax rate of 25%, withdrawal tax rate of 5%, 2% pension fund yield, 6% IBKR yield (pre-taxes). It makes sense to contribute more into the 2nd pillar for the first ~10 years, but afterwards you would be better off if you always invested those contributions in IBKR.

Conclusion: Increasing contribution rate or doing buy-ins makes sense if you withdraw it in the next 10 years. So either as a young adult planning to buy a property or 10 years before retirement.

5 Likes
27

my pension fund bases insurances on salary, not capital, so I should be fine

This is the plan, I will only withdraw my second pillar and not the one of my fiancée. Partially because she does not have a lot in it, and because she will contribute most of the cash for the purchase, so we own the home 50:50 between us. Unfortunately, the max buy-in will be pretty low, once she reduces to part time work.

4 Likes
28

Here too, the 3-year rule will apply to the voluntary portion.

Don’t know if it’s a general rule but here the Pensionskasse SRG SSR states the opposite.

Im Gegensatz zu persönlichen Einlagen unterliegen sie im Falle eines spÀteren Kapitalbezuges nicht einer dreijÀhrigen Sperrfrist.

Also, one question still unanswered for me about the voluntary contributions: are they attributed to the mandatory portion or extra-mandatory portion of your pension fund? I would suspect it’s the latter, but is that the case for all pension funds? Anyone know of the legal basis for that matter?

Sorry for the formatting, first time posting.

EDIT: I found this about employees of the Bund:

Art. 36a Sondersparguthaben
1 FĂŒr jede versicherte Person, die freiwillige SparbeitrĂ€ge nach Artikel 25 leistet oder deren Arbeitgeber einen zusĂ€tzlichen Sparbeitrag nach Anhang 6a Ziffer I leistet, wird ein individuelles Sondersparguthaben gebildet.
2 Das Sondersparguthaben setzt sich zusammen aus:
a. den freiwilligen SparbeitrÀgen nach Artikel 25;
a-bis. den zusÀtzlichen SparbeitrÀgen des Arbeitgebers nach Anhang 6a Ziffer I;

2 Likes
29

I‘m not sure about the laws around this, but I enquired with my pension fund and they confirmed that the extra contributions are not impacted by the 3 year rule.

We‘ll be signing the purchase contract at the notary on Friday (the 13th, nonetheless
), if everything goes as planned. Price moved up to CHF 1.0M, which is still fair, all considered. Wish me luck that the deal goes trough.

3 Likes
30

Thanks for bringing that to my attention. I’ll need to look into that. I just reviewed the BVG law, and the 3-year rule only appears in the law governing limitations on voluntary purchases of benefits (article 79b). The law governing limitations on insured salaries (article 79c) does not mention the 3-year waiting period. I have to research the topic more thoroughly, but looking at some pension fund statutes (like the ones you linked), it would seem that voluntary benefits accumulated by raising the insured salary above what is compulsory are not subject to the 3-year waiting period. That would be good news if you want to save on a tax-privileged basis and withdraw the savings in the near future, and you have an accomodating employer and pension fund.

31

Article from Finpension might be helpful. Topic is 3 year blocking after voluntary purchase and includes a link to a ruling on the topic (I have not read the ruling, in German)

2 Likes
32

Helpful. The question here though is the difference between “Einkaufe” (voluntary payments in addition to salary contributions paid directly by you to your pension fund to close gaps) and the “pillar 2b” (the portion of salary contributions transferred by your employer to your pension fund which exceeds the compulsory portion). In the case of Einkaufe, it is clear that there is a 3-year hold on withdrawals. But it seems that the 3-year waiting period does not apply to pillar 2b assets. I’ll dig into that and get back to you.

4 Likes