Withdrawal for residential property

Insured persons may withdraw all of part of their pension assets to purchase residential property for their own use. This withdrawal can be used as capital for the purchase or construction of residential property; it can also be used to repay mortgage loans, purchase shares in an owner-occupied residential property, or finance renovations or make value-enhancing investments.

Insureds below the age of 50 can choose to draw the full savings capital for the purchase of residential property. For those aged 50 and over, there is a restriction: The maximum possible withdrawal is limited to the retirement savings capital accrued at age 50 or half the available pension assets, whichever amount is greater.

However, the withdrawal can be used only to finance the residential property (house or apartment) lived in by the insured person and his or her family. No financing of a second residence is permitted. The residential property may be located in Switzerland or abroad (for example in the case of cross-border commuters), but it must always be the insured's primary residence (the vested benefits agreements between Switzerland and the European Union do not rule out the purchase of residential property using Pillar 2 funds). Insured persons may use their pension assets for only a single property at a time. 

The minimum amount per withdrawal is CHF 20 000. Please note that the advance withdrawal cannot be transferred before the transfer of property (‘handover of keys’).

Any buy-ins to the Pension Fund made during the three years before the desired withdrawal will make the withdrawal non-tax-deductible and subject to subsequent taxation; in addition, the buy-ins made during the three years before the withdrawal cannot be drawn as capital. In case of uncertainty, please contact your tax office.

Appendix_B_2021_E.pdf

Application for advance withdrawal to purchase residential property

Application to pledge assets for financing residential property

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Further Information

Early withdrawal modalities

Up to three years before reaching the normal retirement age, insureds may use occupational pension assets for

  • the purchase and construction of residential property for their own use;
  • the acquisition of shares of ownership in a co-operative residential association, or similar shares, provided the financed dwelling is for their own personal use;
  • the repayment of mortgage loans.

The use of occupational pension assets is permissible for only one property at a time.

Restrictions:

  • The minimum amount of the early withdrawal is CHF 20 000.
  • An early withdrawal may be made every five years.
  • The maximum amount available until age 50 corresponds to the leaving benefit (vested benefit) at the time of the early withdrawal. Insured persons who have completed their 50th year of age are at a maximum entitled to the vested benefits they would have received in their 50th year of age or to half of the vested benefits at the time of withdrawal.
  • An early withdrawal can be made up to age 62.
  • A withdrawal can be made only for the purchase of property for own use as the insured's primary residence. 

An early withdrawal first reduces any pension assets in the ER account, then any assets in the Capital Plan, then those in the Pension Plan. The minimum retirement savings capital under the BVG is reduced in proportion to the vested benefits before and after the early withdrawal.

The early withdrawal is immediately subject to taxation as a Pillar 2 lump-sum withdrawal. Cantonal and municipal taxes, direct federal taxes.

Residential property financed with pension assets is subject to a sales restriction that must be entered in the land register.

The Pension Fund Swiss Re will pay out the early withdrawal no later than six months after assertion of the entitlement.

Send us your application for a withdrawal or pledge along with the requisite documents no later than four weeks before the desired payout date.

Early withdrawal consequences

Withdrawing funds from the Pension Plan or the ER Account reduces your retirement savings capital. Withdrawing funds from the Capital Plan reduces your savings capital (or fund units) by the corresponding amount.

>Click here< to calculate the effect making an early withdrawal from the Pension Plan will probably have on your retirement benefits.

Making such a withdrawal has no effect on the benefits paid out in the case of death or disability.

Advantages of early withdrawal:

  • increased capital
  • reduced mortgage burden
  • lower debt interest

Disadvantages of early withdrawal:

  • immediate taxation
  • reduced retirement benefits
  • lower tax-deductible debt interest

Early withdrawal repayment

You can make voluntary repayments up until: 

  • The date you qualify for retirement benefits 

  • The date an insured event (disability or death) occurs; or

  • The leaving benefits are paid out. 

The minimum amount per repayment is CHF 10 000.

As long as a withdrawal is not paid back in full, there is no possibility for any buy-in to the Pension Fund that qualifies as a tax deduction.

If you repay a withdrawal, you are eligible for a tax refund, which you must apply for from the tax authorities within 3 years. We will send you the relevant form after receiving your repayment.

The withdrawn amount must be repaid to the Pension Fund Swiss Re by the insured person if

  • the residential property is sold;
  • rights are granted to this property that are financially equivalent to a sale; or
  • The withdrawn amount must be repaid to the Pension Fund Swiss Re by the insured person's heirs if no spouse's pension is payable.

If, however, the insured person wishes to use the proceeds from sale of the residential property, within the scope of the early withdrawal, for further residential property purposes within two years, the insured may transfer this amount to a vested benefits scheme and need not repay the amount provided the proceeds from the sale are effectively reinvested in new residential property within this two-year period. The Pension Fund must be notified of this in writing.

Repayment occurs in reverse order to a buy-in, with funds first allocated to the retirement savings capital in the Pension Plan, then the savings capital in the Capital Plan, then the pension assets in the ER account.