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Insured people voluntarily buy into pension funds for 6.8 billion francs – that is a maximum.
Putting additional money into your own pension fund is a trend. In 2020, employees made voluntary one-off payments of CHF 6.8 billion to their pension fund. According to the Federal Statistical Office, this is the highest value in ten years.
This development is not only related to the increased number of contributors. “The Swiss population is aware of the increasing importance of individual efforts to ensure an appropriate standard of living in old age,” says Désirée von Michaelis, Head of Wealth Planning at Credit Suisse.
One-time payments and tax savings
Anyone who voluntarily makes a one-off payment into the pension fund increases their capital or, later, their pension. Another advantage: the deposit is tax-deductible.
As is well known, the second pillar is only one of three pillars in old-age provision. With AHV and Pillar 3a, it is also worth checking what measures can be taken to improve your future pension.
AHV leaves little room for manoeuvre
- Annual salary and contribution period: The annual salary and the number of contribution years are decisive for the amount of the AHV pension. For the current maximum pension of CHF 2,390 per month, the average annual salary must be at least CHF 86,040. Important: Only those who pay their AHV contributions without gaps (men 44 years / women 43 years) are entitled to full AHV. Employed persons are required to pay contributions from the age of 17 and those who are not employed from the age of 21.
- Avoid contribution gaps: The maximum AHV pension falls by 2.3 percent for each year of missing contributions – for life. With five missing contribution years, it is already 272 francs less per month.
- Subsequent payments only possible to a limited extent: Your own AHV account statement provides information about contribution gaps. It can be ordered from the compensation office. If there are no contribution years, it must be clarified whether the gaps can be closed. However, only the last five years can be counted retrospectively.
- Defer AHV pension: Those who reach normal retirement age can defer drawing their AHV pension by one to five years. This increases the old-age pension when it is drawn: by 9.4 percent if it is deferred by nine to eleven months according to the AHV.
Pillar 3a: securities or interest account?
- Pure 3a savings plans are stagnating: According to the Federal Statistical Office, in 2019 around 60 percent of the employed made contributions to the tied, private provision, the so-called Pillar 3a. 135 billion Swiss francs are currently invested in Pillar 3a. Given the low interest rates, it is hardly surprising that payments into 3a savings accounts stagnated. In contrast, 3a fund solutions recorded growth of 17 percent.
- Younger people hold more securities: According to the Federal Social Insurance Office, the proportion of such unit-linked 3a accounts is around 30 percent (2013: 20 percent). And according to data from the Swiss Pensions Association, younger Pillar 3a savers in particular are increasingly investing in securities.