After the Swiss people approved the AHV revision by a narrow majority on September 25, 2022, it will come into force on January 1, 2024. In addition to adjustments in the first pillar, the reform also introduces changes in the second pillar that are important for pension planning.
Most pension funds already allow their insured members to draw old-age benefits early as part of a partial retirement. With the AHV revision coming into force, all pension funds are now obliged to enable partial retirements. Partial withdrawal of old-age benefits can at least partially compensate for the income lost due to a reduction in working hours. For example, someone who reduces their working hours from 100% to 70% at age 60 can already draw 30% of their pension fund assets.
The AHV reform now stipulates that the pension fund annuity can be drawn in up to three stages. Provident institutions can also go beyond this and allow more partial retirement steps. However, the withdrawal of old-age benefits in capital form is permitted in a maximum of three stages. This also applies if the salary earned from an employer is insured with several provident institutions.
Regarding the timeframe, the rule is set so that the reference age in the second pillar is 65 years, regardless of gender. Legally, a first partial retirement step with a benefit withdrawal from the second pillar is possible from age 63. Provident institutions can provide for a lower age, but the earliest possible retirement age is 58, and the deferral of old-age benefits is still possible up to a maximum of age 70.
An advantage of partial retirement is that provident capital continues to be built up through part-time employment, and protection against death and disability exists until full retirement. No additional AHV contributions are due, which is usually the case with full early retirement. In the case of partial retirement, AHV contributions are still due on the part-time income.
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- Sena Hangartner
