According to the federal law of December 17, 1993 (in force since January 1, 1995) to promote home ownership ("WEF") using funds from the occupational pension fund and to the related ordinance, pension assets can be withdrawn early or pledged for the purpose of funding the purchase of a home for residential use by the member of the pension fund concerned.
Early withdrawal / pledging of funds from occupational pension fund
You can use your pension assets (vested benefits) within the limits of the legal provisions for:
- The purchase or conversion / renovation of a home for own use
- The repayment of an existing mortgage
- The acquisition of shares in a building cooperative
You must be the owner of the property and live in it yourself (within the meaning of principal residence).
Things worth knowing about early withdrawal
- Up to the age of 50, you can in principle use all your pension assets for funding your home ownership; after 50 there are legal restrictions.
- Voluntary extra contributions of the last three years are excluded from early withdrawal.
- The withdrawal leads to a reduction in pension benefits.
- The early withdrawal is liable for tax and (if you live in Switzerland) is reported by law to the Federal Tax Administration.
- In the case of cross-border commuters, tax is deducted at source.
- An early withdrawal can be made every five years up to the age of 62 at the latest
- Repayments (minimum CHF 10,000) are possible at any time, until the occurrence of an insured event (retirement, disability, death) but no longer than age 65 at the latest.
- If the property is sold, you are in principle required to repay the withdrawn sum, which in Switzerland is recorded with a note in land register
- Voluntary extra contributions are not possible until the full sum withdrawn has been repaid.
Things worth knowing about pledging
- Up to the age of 50, you can in principle pledge all your pension assets or insured benefits to a mortgage lender for the purpose of funding your home ownership; after 50 there are legal restrictions.
- The pledge does not lead to a reduction in your pension benefits as long as the pledge is not realized.
- The pledge does not have any consequences with regard to tax as long as the pledge is not exercised.
- The realization of a pledge is treated as an early withdrawal.