Promotion of home ownership. Invest pension assets in a home of your own.

Up to age 50, the amount of your current termination benefit is the maximum you can withdraw in advance to invest in your residential property.

From age 50, withdrawals are limited: The maximum capital available is either the termination benefit that you would have been entitled to at age 50 or half of your termination benefit at the time of the advance withdrawal, whichever is highest.

If capital is withdrawn, an entry must be made in the land register stating that the property has been financed with pension assets. This ensures that if the residential property is later sold, the capital will revert to your pension assets.

As a capital benefit from an occupational benefit scheme, an advance withdrawal is taxable immediately. A repayment of an advance withdrawal is not tax-deductible. Clarify these points directly with your tax authority.

The reduction in retirement benefits caused by the advance withdrawal can only be offset by repayment. Depending on the terms of the pension plan, risk cover (disability or death) can also be expected to be lower. Check with your pension fund whether you should take out a risk policy to cover this shortfall.

An advance withdrawal can be voluntarily repaid before retirement, until the occurrence of another insured event (disability or death) or until the termination benefit has been paid out in cash. The minimum repayment is CHF 10,000.

The advance withdrawal must be repaid if you wish to purchase additional occupational pension benefits voluntarily. This also applies if you intend to sell your home and the capital is not invested in another self-occupied residential property within two years.

2nd pillar pension benefits (retirement, disability, death) or an amount up to the termination benefit accumulated to date can be pledged (for persons over 50 the same restrictions apply as in the case of an advance withdrawal). The pledge option can be chosen up to three years prior to retirement age and must be reported to the pension fund in writing. The written approval of the spouse or registered partner is required.

Some of the options for use of your pension assets as determined by the regulations are limited by the pledge. Insofar as the amount pledged is affected, the agreement of the pledge holder is required in the following cases:

• cash payment of termination benefit
• payment of pension benefits
• transfer of part of the termination benefit in the event of divorce or the dissolution of a registered partnership.
  

Provided you comply with the mortgage obligations, no tax is due, nor is your benefit coverage reduced. However, if the pledged amount needs to be realized, a pledge has the same consequences as an advance withdrawal.

In the 3rd pillar, pillar 3a assets can be used for the indirect amortization of a mortgage, for example. Instead of paying back in instalments, assets are built up for the purpose of repaying the mortgage when it falls due.