Alternatives to pillar 2 for early retirement

Banks, Insurances & Third Pillar
22

Self-employment at older age:
Many 2nd pillars will not accept new clients if the founder is too old. You might have to settle for a fund that is not that lucrative or that will only insure the Mandatory part.

Employment at older age:
2P might exclude preexisting conditions or insist on a bare minimum insurance. This is especially true when working for small businesses.

Also, I don’t think your chances of finding a 100% employment for a few months before your retirement is that realistic. You’d need a real friend to grant you such a favor.

In essence, don’t count on any big annuity if you want to follow this strategy. It may or may not happen.
Maybe the situation will look different around the time you reach the legal retirement age.

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23

Your employer’s pension fund has to accept you, and the conditions for your pension will be the same as for the company’s other employees.

What can (and often will) be excluded are the supplemental disability and survivor’s insurance. But those are less relevant once you have a substantial amount of benefits. With the mandatory insurances from your pension fund, disability and surivor’s pensions are based on the amount of pension benefits you have (just like your old-age pension). So supplemental insurance to close the gap is most important when you have few pension benefits.

Whether or not you can get a job really depends on your skills, experience, health, and what you’re willing to do. Quite a few friends of mine found 100% jobs in Switzerland at age 60+.

24

I don’t really follow that part.

Lets assume that I am making 250K per year right now which is a significantly high salary. Then I get hired at a new job at age of 60 for a job that pays only 120K a year. Will that gap in salary mandate how much of my previous pot can be transferred over to the new pension fund?

If I understood correctly, there was a new law where you have an option to continue paying into your pension fund after the age of 58 even if you quit or lose your job. If that is true, then I can also work for a year at age of 58 and then just decide to keep paying into my pillar 2a till a certain age before going for a pension.

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25

It also depends on the details of the pension plan. If I remember correctly, the maximum buy-in is the capital you would have if you had the current salary and the current pension plan since 25, less the current capital. I don’t know whether transfers have the same limit by law or whether that’s up to each pension fund’s rules and regulations (as it’s tax neutral, it might not be restricted by law).

If the new pension fund doesn’t accept all your savings from the previous pension fund when switching a job, the difference will be transferred to a vested benefits account or foundation.

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26

Yes. At least it can (as @jay said, depending on the pension plan).

It’s usually a non-issue - unless you‘ve made very significant non-mandatory contributions to previous pension funds. When the limit is a multiple of your insured yearly salary, it could easily go into 7 figures on salaries like yours.

On the other hand though, if you’re on a minimum plan like AEIS’s mentioned above, it’s only 640% of your insured salary at age 64. On a small „side job“ salary of CHF 36‘000 less 25‘725 coordination deduction, that’s only CHF 65’760. Not that much.

I believe that (as @Daniel referred to above) mandatory BVG/LPP benefits will nevertheless be preserved as eligible for a pension - but they’re capped on a yearly basis, and early retirees will lack years of mandatory contributions. The maximum amount of mandatory benefits for 50 year olds is only about CHF 175‘000 - though few people will realistically reach that maximum over 25 years from the age of 25.

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