Your future retirement savings are usually built up by means of annual retirement credits. Employees’ contributions are deducted directly from their salaries, with the employer paying in at least the same amount. If you want to enhance your retirement savings to make up for a shortfall in cover, you can do so by voluntarily purchasing additional pension fund benefits.
Together with the first pillar (OASI/DI), the pension paid by your pension fund (second pillar) is intended to secure your accustomed standard of living and give you total pension income of around 60% of your previous salary. If you have any shortfalls in cover, voluntary purchases of additional pension fund benefits may be worthwhile. As a result of such a purchase, the retirement benefits are increased and the benefit coverage is improved and – depending on the benefit plan – the risk benefits are enhanced as well.
The maximum possible purchase amount can be found in the personal insurance certificate sent to you by your pension fund. Your pension fund can tell you whether and to what extent benefit purchases are possible in each individual case. Pension funds often set minimum amounts for voluntary purchases.
On top of that, there are other important conditions you have to meet. For instance, if you have already made an advance withdrawal to finance the purchase of residential property, you must repay that before making any voluntary benefit purchases.
As a rule, your pension fund’s regulations apply. That is why you should talk with your pension fund before making any purchases. The regulations often set minimum purchase amounts. And, depending on the total amount of the purchase, it is possible to individually plan the payment amounts and dates of payment.
According to a Federal Supreme Court ruling of January 2021, if you purchase pension fund benefits, a three-year blocking period applies to later capital withdrawals. Be sure to bear that in mind if you intend later on to draw your retirement savings as a capital benefit.