Pension funds buyback – LPP
Request a pension buyback offer from our chatbot
Better understanding of pension funds buyback – LPP
The buyback is an optional administrative procedure that makes it possible to increase the annuities or available capital at retirement age.
The buyback is an optional administrative procedure that makes it possible to increase the annuities or available capital at retirement age. For a deduction to be applicable, the payment must be made before 31 December of the same year.
The buyback procedure must be undertaken by the employee with her/his insurance company through her/his employer.
Loyco supports its clients’ employees with their buyback procedures.
Frequently asked questions (FAQ)
What is a buyback of insurance years or a pension fund (LPP)?
- A buyback is an optional way to increase your pension capital. It increases the pension’s annuities or capital available at retirement age.
What are the conditions for a buyback ?
- Being affiliated with a pension fund
- To not be incapacitated
- Having a pension gap
- Not having encouraged home ownership ( anticipated payment or pledged)
What is a pension gap?
- A pension gap is the difference between the amount of your pension capital that belongs to you thus far and the hypothetical maximum amount calculated to this day by the pension fund.
How does a pension gap arise?
- After a late start of lucrative activity in Switzerland
- Following an interruption of lucrative activity in Switzerland (travel, international career, maternity, etc.)
- Following a wage increase
- Following a change (upgrade) of pension plan
What are the benefits of a buyback?
- purchases are tax-deductible for employees on ordinary Swiss Tax enrollment or quasi resident tax status (GE canton)
- Assets (including interests) in the second pillar are tax-exempt
- In the event of withdrawal, the pension capital is separated from other incomes and taxed at a preferential rate
What are the downsides of a buyback?
- Once the buyback has taken place, it’s impossible to cancel the transaction
- In the event of divorce or dissolution of a registered partnership, buybacks and vested benefits accumulated during the relationship are divided between the partners
- The buyback cannot be withdrawn from the Swiss social system before a period of 3 years. From a tax point of view, the entire pension asset will not be available, otherwise tax gains of previous years will be cancelled.
Don't miss anything, register for the Loyco newsletter.
Like you, we hate spam! Your e-mail address will be used only to send you our newsletter and information on Loyco’s activities.
You will be given the option to unsuscribe in each email.