Getting 6.8% 2nd pillar annuities when no longer employed?

Banks, Insurances & Third Pillar
1

Is there a way to FIRE long before age 58yo and get the 6.8% 2nd pillar annuities on the mandatory portion rather than take it as lump sum once you reach the pension age? (or whatever the 6.8% will be in the future, probably lower but still higher than other products)

If you’re no longer employed, you must transfer your pension fund to a vested benefits account, and this doesn’t allow taking annuities, only lump sum.

A vested benefits policy seems to allow annuities but lower than 6.8%, this seems inferior to a true pension fund for 2nd pillar (it’s also really hard to find information on these online).

The only way to have a true pension fund looks to be employed at 58yo, or perhaps take a light job then that allows having a pension fund.

Or perhaps some way with being self employed and using Auffangeinrichtung?

Is there any way I missed, anything that’s known to work, anyone planning to take annuities at all?

A separate additional question: an advantage of having vested benefits is that you can split this in 2 so that you can withdraw in 2 separate years. Is there any way to arrange things so that you can do 2 separate withdrawals of the extra mandatory part AND In addition get 6.8% annuities for the mandatory part?

2

Get a job before retirement age.

3 Likes
3

If I’m not mistaken, a new pension fund will only accept your vested benefits up to the maximum regulatory limit for your new salary. It is worth bearing in mind that, should you take a job that pays CHF 25,000 per year, the maximum allowable pension capital for that salary level might only be CHF 100,000.

1 Like
4

this may sound crazy… but I think that you could always start a job, transfer the vested benefits that they take into the pension fund, drop the job and retire… and then once you receive a tiny pension from one employer start another tiny job. Not super efficient, but should do the trick :wink:

The challenge however is to find an employer who was even willing to employ you once you are beyond 58.

1 Like
5

This is genius :smiley:

Would you then be able to convert your full pension with mandatory 6.8% by slicing between multiple pension funds, or would the income be aggregated across pension funds to cap mandatory payments to 6.8%?

So let’s say you accumulate 4x the maximum limit for mandatory. Then you get 4 pension payments at 6.8%.

I guess it might be easier to find a pension fund that pays full rate on the pension.

6

You can only have one mandatory bucket (afaik they’re marked as such when being transferred).

1 Like
7

Yep, would have thought the same. But you could still vet the extramandatpr portion crom multiple pension funds I guess…

8

Simply work for a Swiss employer in the period leading up to retirement age. You will be obligated to transfer all your vested benefits to your new employer’s pension fund. If you work till you reach retirement age, the pension fund will have to pay you a pension at the legal conversion rate (6.8 percent) for the obligatory portion of your benefits.

Whether or not you can get a pension from your extra-obligatory benefits depends on the pension fund. Some will require you to withdraw that part as a lump sum. For those that do pay an extra-obligatory pension, the conversion rate may differ from the legal rate for obligatory benefits. Some pension funds will use a conversion rate that is the average of the obligatory and extra-obligatory rate.

3 Likes