On 25 September 2022, the voters and cantons approved the AHV 21 reform by a close majority. This reform not only brings changes to the first pillar of old-age and disability insurance (AHV), but also has a significant impact on the 2nd pillar of occupational benefits insurance. These changes are particularly important for pension planning.

Changes to the 1^st pillar
Among other things, the AHV 21 reform includes an increase in the reference age for women and flexible retirement options in the 1^st pillar. You can find more information on this in our newsletter from 22 March 2024. 

Changes in the 2^nd pillar
One of the most significant amendments to the 2^nd pillar is the legal incorporation of partial retirement in up to three stages (all withdrawals in a calendar year count as one stage), which is already offered by some pension fund insurances today. The introduction of this flexibility will enable insured persons to fine-tune their retirement planning, as they will not have to withdraw their retirement benefits in one go. This is particularly advantageous for those who wish to gradually reduce their working hours without immediately giving up a fixed income.

Income tax recognition of gradual retirement is subject to the following conditions:

1. There must be a significant and permanent reduction in the level of employment, whereby "significant" means at least 20%
2. The salary must also be reduced to a corresponding extent
3. The retirement benefits received must correspond to the extent of the reduction in the degree of employment
4. Partial retirement and its conditions must be stipulated in the pension fund regulations

Possibilities and risks of partial retirement
Partial retirement offers insured persons more flexibility in planning their retirement. They can withdraw part of their retirement benefits from the age of 63. Your BVG-insurance may offer a lower age for the first withdrawal of benefits, which many already offer. The earliest possible age for retirement under the BVG remains 58 years. The BVG retirement can be postponed on request until the age of 70 at the latest, provided that you are still in gainful employment.

This flexibility enables a gradual reduction in gainful employment and more harmonised financial planning for retirement. However, this flexibility is also associated with risks. In particular, retirement benefits may be withdrawn in the form of a lump sum in a maximum of three stages, which requires careful and early planning. Furthermore, the 3-year lock-in period must always be kept in mind. Tax considerations play a central role here, in order to avoid suddenly falling into a high tax progression or to prevent abusive tax avoidance. In addition, the applicable pension fund regulations must always be analysed in detail and serve as a basis.

A differentiation must also be made between a reduction in workload and partial retirement. In the case of a mere reduction in workload, partial retirement is not automatically assumed. This can therefore lead to other options and tax consequences.

Conclusion
The AHV 21 reform brings significant changes to both the 1^st and 2^nd pillar. The new regulations on partial retirement in particular open up additional planning options, but these must also be carefully examined in order to avoid tax disadvantages.

These adjustments will make it possible to organise retirement more flexibly and individually, which will better meet the different wishes and needs of insured persons.

For successful pension planning, it is therefore essential to familiarise yourself with the new provisions comprehensively and at an early stage. Contact us and together we will work out a customised time and approach plan for your future retirement.

+41 41 226 30 52
This email address is being protected from spambots. You need JavaScript enabled to view it.