In order to encourage the purchase or construction of your own home, the law has provided that pension funds can make funds and guarantees available for this purpose. Details of the two procedures are set out below:
Early withdrawal
Up to three years before entitlement to retirement benefits, an amount may be withdrawn from a member's pension assets in the pension fund and used for his/her own home. However, this does reduce future pension benefits.
As regards taxation and tax deductibility of purchase amounts, an early withdrawal is considered to be a lump-sum payment.
Pledging
A pledge is a security in favour of the Bank. In contrast to early withdrawal, the money remains in the pension fund. Accordingly, as long as the security is not called in, there are no immediate tax consequences or benefit cuts.
Miscellaneous
These arrangements for promoting home ownership apply exclusively to the acquisition or construction of residential property for one’s own use and for a minimum amount of CHF 20,000. This can also be used for the complete or partial amortisation of mortgage loans and investment in residential property.
Up to the age of 50, the entire amount of vested benefits may be withdrawn early or pledged. From age 50, the possibilities for early withdrawal or pledging are reduced. Availability is then restricted to those benefits vested at age 50 or half of current vested benefits.