Voluntary buy-ins into your pension fund
How a voluntary Pillar 2 buy-in works: what the deduction is worth, the three-year lock before a lump sum, the home-ownership rule, and the limit for people who moved to Switzerland.
In one line: A buy-in moves money out of your tax bill and into your pension — one of the largest deductions available in Switzerland, wrapped in rules that bite if you ignore them.
What a buy-in actually is
Your pension fund calculates what your retirement assets would be if you had been insured at your current salary for your whole career. The difference between that figure and what you actually have is your buy-in potential (Einkaufspotenzial), and it is printed on your annual certificate.
Gaps arise from ordinary life: a salary increase (the fund recalculates the maximum against the higher salary), years spent abroad, part-time periods, studying, or arriving in Switzerland mid-career.
You may pay that gap in voluntarily, in one go or in instalments.
The tax advantage
The amount paid in is deductible from your taxable income in the year you pay it. The saving is the amount multiplied by your marginal rate, so a buy-in is worth substantially more to someone at the top of the progression than to someone at the bottom.
Two things follow from that, and they are the whole art of using buy-ins well:
- Buy in during your highest-income years, not your quietest ones.
- Spread the buy-ins. Income tax is progressive, so each successive franc of deduction in a single year saves slightly less than the one before. Splitting the same total across several years — typically the years before retirement, when income is high and the money is needed soonest — saves more tax than one large payment.
The three rules that catch people out
1. The three-year lock. Capital corresponding to a buy-in cannot be withdrawn as a lump sum for three years, or the deduction is reclaimed. If you are planning a capital withdrawal at retirement, your last buy-in has to be at least three years before it. This single rule is the most common reason a well-intentioned buy-in backfires.
2. Home-ownership advances come first. If you have taken an advance withdrawal to finance your own home, voluntary buy-ins are not possible until that advance has been repaid. Repaying and then buying in is a legitimate sequence; skipping the repayment is not.
3. If you moved to Switzerland, there is an entry limit. Someone who moves in from abroad and has never belonged to a Swiss pension fund may buy in at most 20% of their regulatory insured salary per year during the first five years of membership. After five years, the ordinary buy-in potential applies.
Is a buy-in worth it?
It depends on things the fund cannot tell you: your marginal rate now versus your expected tax on withdrawal, how long the money stays locked, what return the fund credits compared with what you could earn elsewhere, and whether you will need the liquidity.
What is certain is that a buy-in is irreversible and illiquid. The money joins your pension assets and follows their rules from that moment on.
Common questions
How much can I buy in?
Your buy-in potential, as stated on your pension certificate. The fund calculates it; you cannot exceed it.
What is the buy-in worth in tax?
The amount contributed multiplied by your marginal tax rate. Because that rate falls as taxable income falls, spreading buy-ins across years generally saves more than a single large payment.
Can I take the money as a lump sum afterwards?
Not within three years of the buy-in without the deduction being reclaimed. Plan the last buy-in at least three years before any planned capital withdrawal.
I took money out for my home — can I still buy in?
Not until the home-ownership advance has been repaid. Repayment restores the ability to make deductible buy-ins.
Sources: BVG (SR 831.40) Art. 79b (voluntary buy-ins; para. 2 on repayment of a home-ownership advance, para. 3 on the three-year lock before a lump-sum withdrawal) and Art. 30c–30d (home-ownership advance); BVV 2 (SR 831.441.1) Art. 60b (buy-in limit in the first five years for people arriving from abroad); DBG (SR 642.11) Art. 33 (deduction of occupational-pension contributions); your pension fund's certificate and regulations.
Educational information, not financial advice. Whether a buy-in suits your situation depends on your own tax position and liquidity needs.