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Glossary

Early Withdrawal Pillar 3a

Early Withdrawal Pillar 3a is the premature disbursement of tied pension capital before ordinary retirement age. It is permitted only in cases defined by law, such as acquiring owner-occupied residential property, switching to self-employment, or permanently leaving Switzerland.

At a glance

  • Art. 3 para. 2 BVV 3 allows early withdrawal by dissolving the pension arrangement. It covers moving to a different kind of self-employed activity, a full IV (Disability Insurance) pension where the invalidity risk is not insured, and the cash-payment cases of Art. 5 FZG (Vested Benefits Act), in particular permanent emigration and taking up self-employment outside mandatory occupational provision.
  • Art. 3 para. 3 BVV 3 allows it for owner-occupied residential property, namely for purchase and construction, participations as well as repayment of mortgage loans, and under para. 4 at most every five years.
  • A voluntary purchase into a tax-exempt pension institution and a transfer into another recognised pension form under Art. 3a BVV 3 also dissolve the pension arrangement, but do not pay the capital out.
  • The disbursement is taxed separately from other income at a reduced pension provision tax rate.

Frequently asked questions

An early withdrawal is possible only where Art. 3 BVV 3 allows it. The pension arrangement can be dissolved on moving to a different kind of self-employed activity, on a full IV (Disability Insurance) pension where the invalidity risk is not insured, and in the cash-payment cases of Art. 5 FZG, in particular permanent emigration and self-employment outside mandatory occupational provision. Owner-occupied residential property also qualifies, namely purchase and construction, participations and repayment of mortgage loans.
The early withdrawal is taxed as a one-off payment, separately from other income, at a reduced pension provision tax rate. The exact amount depends on the canton of residence.

Part of the topic

Pillar 3a

Sources: Bundesamt für Sozialversicherungen (BSV) · Systematische Rechtssammlung (fedlex)

This entry is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.