By voluntarily buying into the pension fund*, you can close a pension gap and save taxes at the same time. This article explains when you can make a voluntary purchase, how the maximum possible pension fund purchase is calculated, and what else you need to consider.

*To simplify matters, we generally use the term “pension fund” in this article, although of course other occupational pension schemes are also meant (such as 1e collective foundations).

When you have purchasing potential

To make purchases, you must have a purchasing gap. Such gaps usually occur in the 2nd pillar in the following situations:

  • You change your employer, which is affiliated with a pension fund that offers higher benefits or your salary is increased.  Then you will also pay more contributions to the second pillar. If you had always paid the higher contributions, you would have saved more retirement savings. You have purchasing potential and can pay the difference by purchasing into the pension fund.
Purchasing gap due to wage and benefit increases
  • You have temporarily not worked. The reasons can be different: Starting a family, studying, entering working life later, unemployment or a trip around the world. If so, you have saved less than you could have saved. You are missing contribution months and/or years.
Missing contribution years
  • You’ re divorced. Then it is likely that you have a divorce gap. In the event of a divorce, the assets accumulated during the marriage or registered partnership are added up and divided equally. If you have saved more pension fund assets during your partnership than your partner, you must pay out your partner. A divorce gap arises in your pension plan.
Divorce gap

Special Case Early retirement

Do you want to retire earlier? Then you have less time to save. Your retirement benefit will be correspondingly lower. You can prevent this by prefinancing the missing contribution years. However, whether you can make use of this option in your case depends on your pension fund. Please refer to the pension fund regulations. Early retirement should be regulated there.

Pension gap due to early retirement

If early retirement is subsequently waived, the regulatory benefits may exceed the benefit target by a maximum of five percent. Let’s assume you had a projected retirement savings of CHF 500,000 on ordinary retirement. Due to the planned early retirement at the age of 62, a gap of 50,000 Swiss francs opened up. You purchased this amount. At the age of 62, you will, therefore, reach the maximum regulatory benefits of 500,000 francs. If you nevertheless continue to work until the regular retirement age, the 500,000 francs may be exceeded by a maximum of 5 percent or 25,000 francs.

Important for your understanding: The actual amounts may differ from this rule in individual cases. However, the pension plan must be structured in such a way that the benefit target is exceeded by a maximum of 5 percent. The pension fund regulations contain various provisions to ensure that the 5 percent rule is observed: Employer and employee contributions are suspended, the interest is stopped and the conversion rate is frozen. If these measures are not sufficient, the funds are allocated to the disposable assets of the foundation. Buying into early retirement should, therefore, be well-considered, as you may suffer disadvantages if you waive your entitlement at a later date.

With 1e plans, things are a little simpler: the maximum purchase sum is calculated on the basis of the contributions. These may not exceed 25 percent of the insured salary per possible contribution year. If early retirement is subsequently waived, contributions are suspended. Your disadvantage: you no longer benefit from employer saving contributions. You have virtually paid them yourself by buying into early retirement.

Condition: No open WEF advance withdrawals

Before you are able to make a voluntary purchase, you must repay any withdrawals made under the Home Ownership Promotion Program (WEF), regardless of the pension fund in which you made the advance withdrawal. A WEF repayment is possible up to three years before retirement, after which it is no longer permitted.

You can reclaim the tax paid on the WEF reference after the refund. For the refund, you have to submit a written request to the tax authority that levied the tax. Important: The tax authorities do not act on their own initiative. The right to a refund expires after three years from the date the WEF advance payment was repaid.

Calculation of the purchasing potential

As described in the previous chapter, there are different circumstances that can lead to a purchasing gap. And although there are different reasons, the gap itself is always calculated identically. Your current pension assets are compared with the assets you could have saved up in the best case:

Purchasing potential

You will find the current retirement assets in the pension statement of your pension fund. The maximum regulatory benefits are calculated as follows (highly simplified formula for illustration purposes)

Contribution years x
savings contributions in % x
current insured salary + (interest and compound interest)

An interest rate of 1.5 % to 2 % is accepted for tax purposes (golden rule). In the case of 1e plans, there is no compounding of interest, as the Supervisory Commission clarified on 8 April 2020.

The difference between the maximum possible retirement assets based on the calculation formula and the current retirement assets corresponds to the purchasing potential. You can often find the maximum amount of a voluntary purchase in your pension statement.

  • Maximum regulatory benefits
  • – Current pension assets
  • = Purchasing potential


With the support of the 1st pillar, the 2nd pillar aims to enable you to maintain your accustomed standard of living in the third phase of your life. The following deductions are intended to prevent you from exceeding the benefit target with a voluntary purchase:

Special case of migration from abroad

If you have moved to Switzerland from abroad and have never been a member of a Swiss pension fund before, you may purchase a maximum of 20 percent of the insured salary during the first five years. Unless you transfer pension assets acquired abroad from a foreign occupational benefits scheme to a Swiss pension institution. However, the transfer is not tax-deductible.

Blocking period of 3 years for advance and capital withdrawals

Prevention of tax avoidance

The legislator allows the purchase of 2nd pillar benefits to close a pension gap. It promotes the closing of such a gap by allowing the purchase sum to be deducted from taxable income. This tax saving is higher than the tax you pay when you withdraw your capital (capital withdrawal tax). To prevent the 2nd pillar from being misused for tax arbitrage transactions, the legislator has taken a precautionary measure:

If you make a voluntary purchase, a blocking period for capital withdrawals is activated. During this period, you may not withdraw any retirement assets in the form of capital. The blocking period is three years. It begins on the day of purchase and ends three years later to the day. Assuming you make a voluntary purchase on September 15, 2019, the vesting period will expire on September 15, 2022. Two full tax periods are affected by the restriction.

3-year blocking period after a voluntary purchase

Both the advance withdrawals (WEF, self-employment, emigration) and the lump-sum withdrawal on retirement are affected by the blocking period. Only if you receive a pension on retirement instead of the lump sum, the vesting period does not apply. As an alternative to an advance withdrawal from the WEF, it is generally and specifically possible to pledge the retirement assets during the blocking period. Pledge is also possible without restriction during the blocking period.

Which pension assets are affected by the blocking period

In its ruling of March 12, 2010, the Federal Supreme Court defined which pension assets are affected by the blocking period. This clarification was necessary because reading the wording of the law (Art. 79b para. 3 BVG) one might think that only the purchase sum would be affected by the blocking period. However, this is not the case: The entire 2nd pillar pension capital is blocked for three years, regardless of the pension fund with which it is held.

If you do not comply with the retention period and make a capital withdrawal during this period, the tax authorities will initiate an after-tax procedure. The tax withheld at that time will be retroactively offset against your tax liability. The difference between the tax that you paid and the tax that you would have had to pay without the deduction will be charged to you retroactively.

What happens if the blocking period is violated?

If you do not observe the blocking period and withdraw a lump sum during this time, an after-tax procedure is initiated. The tax deduction at that time will be charged to you retroactively.

There is no capital withdrawal tax calculated on the subsequently rejected purchase amount.

Exception Closure of divorce gap

There is no blocking period after the re-purchase to close a gap in the divorce settlement.  Capital withdrawals within the following three years are generally possible.  However, the Federal Supreme Court’s ruling of July 18, 2016 reserves the right to review tax avoidance. Such tax avoidance was established in the following case: 14 years after the divorce, an insured person made a purchase to cover a gap in the divorce settlement. He financed the purchase by taking out a loan from his mother. Two years later he withdrew the capital and presumably repaid the loan. In this specific case, the re-purchase to close the gap in the divorce settlement was not accepted and was subsequently offset. It is obvious that the insured only wanted to make a tax deal with the purchase and later redemption.


  • If your tax domicile is not in Switzerland or there is no regular taxation, the deductibility and effects of purchases must be carefully examined.
  • Purchases cannot be reversed. Purchases may only be reversed on the instructions of the tax authorities.
  • Although we have carefully researched this article, we cannot guarantee that it is complete, correct and up-to-date.

In another article we look into the question of when it makes sense to buy into the pension fund voluntarily.