Using margin loan from IB to buyback second pillar

Hi everyone,

I’m thinking about using a margin loan from IB near the end of this year to withdraw cash and then make a voluntary contribution to my second pillar in order to save on taxes for this year.

Would it be a good idea ?

How old are you?
Did you do the math on it?

No, it’s a bad idea, because it’s illegal.
The money needs to be your own, not a loan

Pension funds tend to give you a low return (of course there are exceptions). So I would be careful in locking your money there in, when you could invest the money yourself.

Now in your case, where you dont even have the money, it does not seem like a good idea anyway.

Do you have a reference? In practice you’re just increasing leverage, why would they care if you have a lombard loan, if you refinanced your house or anything?

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I have done this because I plan to RE in the next 2-3 years and my marginal tax rate is quite high (Geneva canton). When I stop working I will put my 2P into a Vested Benefits account so I will be able to stay at my target % equities.

If I was further from retirement I would not do it for similar reasons as outlined by others.


@Barto Did you declare the loan on your tax sheet ?

I’m not able to find anymore the article. But some cantons will say that it’s tax optimisation.
The goal of the buyback is to be able to live in the retirement.

And why does it matter if the money came from a lombard loan or just from selling some assets? It’s tax optimisation in either way.

The tax authorities can’t even know that you used a lombard loan for the buyback. You could also just make a buyback with your savings and take a lombard loan to go on expensive holidays or whatever else, how would the tax authorities know that you used the lombard loan for the buyback?


The loan should be displayed on your asset as a negative asset.

Then it would mean anyone with a loan (e.g. mortgage) is not able to buy in? That seems odd.

Yes, that doesn’r change anything about the fact that the tax authorities do not know (and do not care) for what you use the loan.

I have a lombard loan as well on my tax statement and I used it to leverage and buy more securities. So according to you I would not be able to make a second pillar buy in with my savings, because I have a loan?

Yes and the loan, the interest, and the repurchase were all accepted.

There is a 3 year rule whereby withdrawals are not permitted else you have to repay the tax saved. The tax authorities sent me a note to that effect

If someone put 100% of their salary into 2P then withdrew it after 3 years and 1 day to buy a house that could be argued as tax optimization. It is not my case


Where do you read it?

Many people take mortgage loan increase and buyback 2nd pillar.

Dont trust everything that is written on this forum :grinning:

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Give me some time, I’ll come back with more info.

First clue, on the Swisslife buyback sheet, it’s written:
“I have to finance the takeover with my personal fortune and be able to prove it.”

Same information here:

Then again, increasing your mortgage has beensugggeszed on a more mainstream news site:

Einkauf Pensionskasse durch Erhöhung der Hypothek

Correct but these are just the conditions of those perticular pension funds which each institution can decide on their own. There is AFAIK no law that sets any restrictions on where the money for the buyback has to come from.

Source from 2020 (Sorry it’s in german):

Here is a court case from the federal court where a man bought into the pension fund with a loan from his mother:

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Big spiritual difference if you’re obtaining a loan against your own assets (which you could sell) with the purpose of funding pillar 2 which you don’t plan to draw on immediately, or if you obtain a loan without collateral for a contribution which you plan to withdraw in the short term.

In one case you already have the funds, you could sell stock to fund the contribution.
In the second, you don’t AND make the tax office mad through Bad Timing

This one is a little different.

  1. purchased back 14 years after his divorce and less than 3 years before retirement
  2. there are specfic clauses for divorce. Repurchase is possible right away, even if the money was taken out for a real estate purchase
  3. unusual loan contract with his mother: 1) no end period 2) no interest payment. The taxpayer said it was an “advance on inheritance”

in a nutshell → poor tax planning and it was qualified as tax evasion by the Federal Court


Yes, loan contracts should in general include following chapters:

  1. Name of the persons involved in the contract
  2. Loan amount
  3. Interest rate (can be 0%)
  4. Duration of the contract (meaning at end date the amount has to be paid back unless otherwise stated)
  5. Conditions for termination and repayment

True for the tax evasion part but using a loan to repurchase 2nd pillar is not against the law. The fact that he had to loan the amount from this mother (meaning he propably didn’t have it himself) was just an additional justification point for the court for the case of tax evasion besides repurchasing in 2013 and 2014 and then pulling all the capital in 2015 (which is against the law as you pointed out).