Early 2nd pillar withdrawal

Banks, Insurances & Third Pillar
21

Really?

I was told clearly that all pension fund assets gets blocked (across the 2nd pillar - 1E, 2nd pillar , VB) for three years

2 Likes
22

A related question for early withdrawal of 2nd and 3rd pillar for moving abroad, assuming I move to a country outside of the EU and receive a lump sump, what happens if I move back say in 3 or 5 years later.

  • Would I be required to redeposit that amount?
  • Can I also leave it in a vested account even if I am no longer a resident of CH? kinda as a saving account for myself here till I come back
23

My employer pension fund states the same. No buy-in from last 3 years and any interest earned on it.

So in @Locess example it’s 20k plus interest earned on it up to the date of withdrawal.

1 Like
24

yep, i did a voluntary buy-in in December last year, then got a pension certificate issued in March this year. There is a line saying:

Advance withdrawal for purchase of residential property Possible early drawing amount ni favor of residential property

and the number is equal to all of my pension assets, minus the amount I bought in

25

Blocking period for early withdrawals and capital payments

In the case of a voluntary purchase, a blocking period of 3 years is levied on the entire 2nd pillar pension capital, irrespective of the pension foundation. This blocking period also applies to early withdrawals.

https://finpension.ch/en/1e/faq/blocking-period-for-early-withdrawals-and-capital-payments/

2 Likes
26

My pension fund statement states otherwise. Only buy-in and the interest earned in it is blocked for 3 years.

27

If you want you can look at 2C_6/2021 case of law.
I

28

Sounds a bit odd - what they interpret vs. how the legislation they link to is worded:
“If purchases have been made, the resulting benefits may not be withdrawn from the pension plan in the form of capital within the next three years”

To me the bold part - resulting benefits - should only refer to the purchased-in portion of the whole.

It sounds a bit stupid to me to e.g. have 1M assets there, buy-in 10k, and have the entire 1.01M blocked.

2 Likes
29

Suppose you have 100k in 2P and 100k cash, and you need 100k deposit to buy a house

The reason the whole amount is blocked is that otherwise it would make sense to do a voluntary 2P purchase for 100k, withdraw the original 100k in 2P to buy the house, thereby keeping your pension pot whole and saving a load of tax in the process

30

I think this might be the money you can withdraw
But I think if you withdraw anything within 3 years, you would need to pay back the tax benefit you received when making the voluntary contribution

3 Likes
31

Which pension assets are affected by the blocking period

In its ruling of March 12, 2010, the Federal Supreme Court defined which pension assets are affected by the blocking period. This clarification was necessary because reading the wording of the law (Art. 79b para. 3 BVG) one might think that only the purchase sum would be affected by the blocking period. However, this is not the case: The entire 2nd pillar pension capital is blocked for three years, regardless of the pension fund with which it is held.

If you do not comply with the retention period and make a capital withdrawal during this period, the tax authorities will initiate an after-tax procedure. The tax withheld at that time will be retroactively offset against your tax liability. The difference between the tax that you paid and the tax that you would have had to pay without the deduction will be charged to you retroactively.

What happens if the blocking period is violated?

If you do not observe the blocking period and withdraw a lump sum during this time, an after-tax procedure is initiated. The tax deduction at that time will be charged to you retroactively.

There is no capital withdrawal tax calculated on the subsequently rejected purchase amount.

1 Like
32

Ok so then my pension fund certificate is saying: “here’s the amount of money you can withdraw, paying capital withdrawal tax. but if you do that, you also have to withdraw the money you voluntarily paid in additionally, and have to pay the income tax on it which you previously saved”