"Early retirement" option in 2nd pillar pension

Hi all
I was looking mostly out of curiosity at the possibility to pay into the 2nd pillar, since I have a plan with my company that last year gave 5% interest on überobligatorium and 3% on “obligatorium” wealth (insurer is AXA). It’s market dependant and in bad years they should give you just the minimum 1% interest rates for both parts.
The good interest rate combined with the tax deduction + I started a job late (25 y o) means I could fill in some of the hole I have there.

AXA has a portal where you can do a self service payment information so that you can then actually pay the money in your 2n pillar. In doing this, I saw that I have a hole of 28’000, and on top of it I could add even more money (up to 293’000) for “early retirement”.

My current date of 2nd pillar benefit is 1.1.2049. If I pay 293’000 extra for early retirement, that date change to 1.2.2042, 7 years earlier (I will be 58), but if you don’t retire by that date, you lose money:

Warning concerning early retirement payment

With the purchase for early retirement, your retirement age is reduced to the corresponding retirement date. However, if you do not retire on this retirement date, you will forfeit the part of your retirement assets that exceeds 5% of the regulatory performance target of the occupational benefits fund.

The difference I see is that the pension/month increase to 3873 chf/month, which is the same “capped” value if I simply “close the gap” of 28k. The difference with the extra “RE” funding is that I can start receiving this sum 7 years earlier.
The same for the assets if I choose to receive the assets. If I take out all the capital at 65, they calculate 783000 chf, if I take them out at 58 (7years less of interests and contribution, but have paid 293k before that), I can take out 1’000’000 at 58.

This was not the case at my former employer, where 2nd pillar was at 65 and i could onl pay to cover the gap because of my late career start. Is this some kind of special insurance my company got, or is more and more common place? Being able to take out the entire capital at 58 was something I was not aware of (of course, only if I pay into this “extra RE bucket”).

Not sure if this changes with age as well, like it will be more expensive for me later on near 58 to lower my retirement age. I find very little information on the AXA website on this topic actually. What would happen if I retire even earlier? EVerything would go into a “Frezügigkeitskonto”, but do I have the same rights and can take it out at 58…? Will try to investigate.

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The basic laws governing the second pillar (the earliest age for retirement at 58, for example) are the same for all pension funds and vested benefits foundations.

Other rules, including the option to contribute extra towards early retirement, vary between pension funds as per their terms and conditions. Whether you can choose between withdrawing a lump sum or getting a pension, or a combination of both, is also up to the pension fund. Even the rules governing what happens to your second pillar assets if you die depend on the pension fund.

It is not uncommon for pension funds to give you the option of cashing out a lump sum instead of receiving a pension. Some let you cash out voluntary benefits, but keep your compulsory benefits and pay you a pension on these. The more flexibility your employer’s pension fund offers with regards to making voluntary contributions, and choosing between lump sums and pensions, the better for you.

You can find more info on lump sums vs. pensions here:

Thanks. I found as well more information on the link below. It seems that if your Pensionkasse allows it, you can take out all the capital already with 58.
I did not know that. But it depends on many factors.

Are there Vested Benefits account that allow to take out with 58? Or is Pensionskasse only? Cannot really find this information…VIAC it seems you can take it out 5 years before AHV, so as of today with 60 years old.
Could be a good things to know if you Retire Early (like 50) and then you only need to wait 8 years instead of 10 to get the capital of 2nd pillar.

4 Likes

So Freizügigkeit Konto is always 5 years before AHV age. While employer 2nd pillar can be 58 if so regulated.