What is the 2nd pillar?
The 2nd pillar is governed by the Loi sur la Prévoyance Professionnelle (LPP) and is one of the pillars of social insurance in Switzerland. It supplements the 1stpillar (AVS) to guarantee an adequate income once you retire.
Contributions to the 2nd pillar are generally shared between employer and employee. However, some companies voluntarily decide to pay a higher proportion of the contribution.
On commence à cotiser au 2ème pilier à partir du 1er janvier qui suit la date à laquelle l’assuré a eu 24 ans, soit l’année de ses 25 ans, pour ce qui concerne l’épargne retraite. Pour l’assurance risque de décès et d’invalidité, les cotisations débutent à partir du 1er janvier qui suit ses 17 ans, soit l’année de ses 18 ans.
The amount of the contribution varies according to the age of the insured.
Minimum BVG rate according to age
The minimum legal contribution rates for the 2nd pillar, depending on the age of the insured, are as follows:
25 to 34
7%
35 to 44
10%
45 to 54
55 to 65*
18%
* 64 for women.
BVG/LPP 2023 coordination deduction (coordinated salary)
The purpose of the coordination deduction is to set the amount of salary that will be covered by the pension fund. This amount is equal to seven-eighths (7/8 = 87.5%) of the maximum annual AVS pension, which is currently CHF25,095 Swiss.
However, this figure may vary depending on the pension fund regulations.
The coordination contribution must be deducted from the gross salary, as this sum is already covered by the AVS compensation fund.
How do I calculate my BVG contribution?
In Switzerland, contributions to the Occupational Benefit Plan BVG are based on the coordinated salary, which corresponds to the portion of annual salary exceeding the coordination deduction.
The contribution percentage depends on the employee's age (see above).
An employee aged 35 to 44 contributes 10% of their coordinated annual salary. This contribution is split equally between the employer and the employee (50/50).
Let's take the example of Mr Muller, aged 42 with a coordinated salary of 44,620 CHF (gross salary - coordination deduction).
His total BVG/LPP contribution would be CHF4,462, or 10% of his coordinated salary.
Thus, Mr Muller's share of the 2nd pillar contribution would be CHF2,231, 50% of the total contribution.
It is important to note that this information is indicative and may vary depending on the pension fund's pension regulations.
2nd pillar purchases
A purchase from the 2nd pillar is made with your pension fund. A purchase is a way of filling gaps in your occupational pension provision. Your salary may have changed over time.
To make a purchase, simply contact your pension fund and ask them to provide you with the amount you can purchase, complete the form, make the payment and carefully keep the certificate provided by your pension fund.
The second pillar purchase is deductible from your taxable income. But in order to take full advantage of the tax deductibility, you must not withdraw your 2ndth pillar within 3 years of the purchase.
If you withdraw from the 2nd pillar following a purchase, the tax authorities will carry out a tax recall, which consists of "retaxing" you as if you had not made a purchase.
Withdrawing your 2nd pillar
The 2ndpillar is generally received in the form of an annuity or capital once you reach retirement age. However, there are other ways in which this capital can be used for life projects.
Withdrawal of 2nd pillar for the purchase of a principal residence
To finance a property with your 2nd pillar, you need to submit an application to your pension fund. The steps to follow are as follows:
- Complete the dedicated form, available to download from your pension fund's website or get in touch to have it sent to you.
- Provide all the supporting documents requested.
Il est important de noter que, pour les personnes mariées, le consentement écrit du conjoint est obligatoire pour libérer les fonds.
Once your application has been validated, and if the LPP conditions have been met, your pension fund will transfer the funds directly to the notary, who will act as intermediary with the bank.
An alternative to early withdrawal is pledging the 2nd pillar. This option, subject to the same conditions as early withdrawal, can offer better financing terms for property purchases.
It should be noted that BVG can only be used to finance a principal residence, whether a house or a flat. It cannot be used for asecond home or a investment property.
Theprimary residence may be located in Switzerland or abroad, which may particularly affect cross-border buyers.
Withdrawal to start self-employed activity
Il est possible dans le cadre du lancement d’une activité indépendante de puiser dans votre avoir du 2ème pilier, si l’activité nécessite un investissement de départ important. Toutefois, certains critères doivent être respectés :
- Cessation de votre emploi salarié : Si votre activité salariée vous rapporte plus de 21'510 CHF par an, le retrait de votre 2ème pilier ne pourra pas aboutir.
- Démarrer une activité indépendante : Pour cela, il faut que votre statut d'indépendant soit reconnu par votre caisse AVS. Ce statut est accordé aux entreprises en Raison Individuelle (RI) et aux sociétés en nom collectif (SNC).
Remarque : Il est possible d’ensuite faire passer la RI ou SNC en Sàrl ou SA.
- Délai de la demande : Après avoir acquis le statut d'indépendant, un délai de 12 mois est généralement donné pour solliciter le retrait de votre avoir LPP auprès de votre caisse de pension.
- Démarrer une activité indépendante : Pour cela, il faut que votre statut d'indépendant soit reconnu par votre caisse AVS. Ce statut est accordé aux entreprises en Raison Individuelle (RI) et aux sociétés en nom collectif (SNC).
- Consentement du conjoint ou partenaire : Pour les personnes mariées, l'accord écrit du conjoint est nécessaire pour le retrait du 2ème pilier.
It is important to note that withdrawing from the 2nd pillar and becoming self-employed are decisions that should not be taken lightly.
As a self-employed person, the contributions you pay towards your pension (AVS) depend on your company's results. You will then need to build up your occupational savings with a 2ndth or 3rd pillar to guarantee yourself a comfortable pension once you reach retirement age.
More information : 3rd pillar benefits for the self-employed
Withdrawal for permanent departure abroad
Bonne nouvelle pour ceux qui veulent partir là où le beau temps est présent toute l’année, le retrait du 2ème pilier pour départ définitif de la Suisse est possible, mais les modalités varient selon la destination choisie.
If you are moving outside the EU/EFTA :
- Vous pouvez librement retirer l'intégralité de votre 2ème pilier lors de votre départ de la Suisse.
- La somme reçue sera soumise à un impôt anticipé.
Pour un déménagement vers un pays de l'UE/AELE :
- Les Accords sur la libre circulation des personnes s'appliquent indépendamment de l'âge.
- L'avoir minimal de vieillesse LPP (part obligatoire) ne peut pas être versé en espèces, mais conservé en Suisse jusqu'à l'âge de la retraite.
- Vous pouvez retirer cet avoir en espèces seulement si vous prouvez que vous n'êtes pas soumis à la sécurité sociale du nouveau pays de résidence.
- You can receive contributions in excess of the compulsory BVG portion.
Procedure to follow :
- Inform your pension fund of your definitive departure.
- Provide proof of this departure, return your work permit, and the OCPM will issue you with a certificate.
- If you are moving to an EU/EFTA country, submit a certificate confirming that you are not affiliated to the new country's social security scheme.
It is important to bear in mind that the tax treatment of this withdrawal may vary depending on the country of destination.
The credit balance will still be taxed in Switzerland and may also be taxed in your new country of residence.
In some cases, it is possible to reclaim tax paid in Switzerland.
Impôt sur retrait du 2ème pilier en Suisse
La Suisse taxe les prestations en capital à un taux représentant 1/5 du taux d’imposition.
It is the canton of residence that collects the tax. You must send a copy of the proof from your pension fund to the tax authorities in your canton.
Pour les personnes résidant à l’étranger, l’imposition de la prestation en capital est faite à la source
Montant des impôts 2ème pilier selon les cantons Romands
Tax on 2nd pillar withdrawals
canton of Geneva, municipality of Geneva
Withdrawal amount
CHF 50,000
CHF 100,000
CHF 250,000
CHF 500,000
CHF 1,000,000
Single person
CHF 1,457.55
4’620.85 CHF
CHF 16,725.40
39’272.85 CHF
CHF 84,957.70
Married person
CHF 464.70
CHF 3,126.60
CHF 14,622.80
CHF 35,746.50
CHF 80,379.30
Tax on 2nd pillar withdrawals
canton of Vaud, municipality of Lausanne
Withdrawal amount
CHF 50,000
CHF 100,000
CHF 250,000
CHF 500,000
CHF 1,000,000
Single person
CHF 1,690.60
4’658.85 CHF
CHF 17'552.35
42’172 CHF
90’781.30 CHF
Married person
CHF 1'345.55
CHF 3,691.15
CHF 15'236.15
CHF 38,187.15
CHF 87,097.50
Famille mono-parentale
CHF 1,502.95
CHF 4'098.50
CHF 16,390.70
CHF 40,469.65
CHF 89,399.95
Tax on 2nd pillar withdrawals
canton du Valais, commune de Sion
Withdrawal amount
CHF 50,000
CHF 100,000
CHF 250,000
CHF 500,000
CHF 1,000,000
Single person
CHF 2,185.55
4’760.45 CHF
14’483.20 CHF
38’041.30 CHF
CHF 103,000
Married person
2’100.40 CHF
4’498.60 CHF
14’052.20 CHF
37’171.15 CHF
101’400 CHF
Tax on 2nd pillar withdrawals
canton de Fribourg, commune de Fribourg
Withdrawal amount
CHF 50,000
CHF 100,000
CHF 250,000
CHF 500,000
CHF 1,000,000
Single person
CHF 986
CHF 3,260
17’483 CHF
46’583 CHF
CHF 104,000
Married person
CHF 762
CHF 2,723
16’362 CHF
45’362 CHF
103’100 CHF
Conclusion
It is possible to pay less tax when you withdraw from your 2ndpillar. To do this, simply spread your withdrawals over several tax periods to break the progression of the rate.
Our experts are on hand to discuss your situation and advise you on your pension arrangements.
FAQ - 2nd pillar
Si vous touchez un salaire annuel dépassant 22’050 CHF en 2024, ce qui équivaut à environ 1’837.50 CHF par mois, vous commencez à contribuer au deuxième pilier à partir du 1er janvier de l’année qui suit vos 17 ans soit l’année de vos 18 ans (uniquement risques liés au décès et à l’invalidité).
Then, from the 1st January following your 24th birthday, i.e. the year in which you turn 25, provided you still meet these income criteria, you start saving for your retirement under the second pillar.
Buying into the 2nd pillar allows employees to make up for years of no or low contributions to their pension fund.
Buying back increases your retirement pension, improves death and disability benefits, and offers a tax advantage since the amount of the buy-back can be deducted from taxable income for the year concerned.
In the event of divorce, second-pillar assets are generally divided between the spouses.
If only one spouse has contributed to the second pillar (for example, if the other has devoted himself or herself to bringing up the children), he or she will normally have to share these assets on divorce.
However, if a spouse waives partition, the final decision rests with the judge.
For advice tailored to your particular circumstances, it is advisable to consult a lawyer in connection with your divorce.
If you change jobs, you should transfer your 2nd pillar to your new employer's pension fund.
If you leave your job, you will need to open a vested benefits account with an insurance company or bank.
Oui, il est possible de retirer une partie ou la totalité de votre 2ème pilier pour l’achat d’une maison à l’étranger, sous certaines conditions:
- Le bien immobilier doit être destiné à votre résidence principale, même à l’étranger.
- Certaines institutions de prévoyance imposent des restrictions quant aux pays où le retrait est possible.
Pour les frontaliers, la valeur locative du bien peut être utilisée pour la fixation du taux d’imposition en cas d’imposition du salaire en Suisse.
