Capital withdrawal or pension
under an occupational benefit scheme.
For many employees, the occupational benefit
scheme is their main source of income after retirement. The form in which the retirement benefits
from the second pillar are drawn at the time of retirement is therefore of key importance.
An individual personal decision
Every person is unique. This is reflected in our lifestyles,
needs and goals, and not least in our income and financial situation. At least by the time we reach our
mid-50s, we should start thinking about our financial situation after we retire and start planning ahead. What is the
right solution for you personally? A life-long pension, a single capital withdrawal or a combination of both?
Pros and cons of a pension versus capital withdrawal at a glance
Capital withdrawal
◾ Financial flexibility due to higher assets.
Pros
◾ Free choice of investment opportunities, debt/mortgage
can be repaid
◾ It can be passed on as part of an inheritance.
Cons
Taxes
Pension
◾ Regular, guaranteed life-long income.
◾ Typically, survivor’s pensions for spouses, registered
partners, partners and children.
◾ Administrative expenses and risks associated with investments have to be borne by the customer.
◾ It cannot be passed on as part of an inheritance.
◾ A guaranteed life-long pension is no longer an option.
◾ Hardly any prospect of benefiting from higher yields.
◾ There can be uncertainties over the amount of money
needed with regard to life expectancy.
◾ No flexibility as regards extraordinary expenses.
◾ It is taxed once at a reduced rate at the time of withdrawal,
thereafter treated as an asset.
Your Swiss Insurer.
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◾ 100% taxed as income.
Answer the following questions to
help you make a decision
If you answer most questions with “yes”, you are
leaning towards capital withdrawal; if you answer
most questions with “no”, you are leaning towards
a pension.
◾ Do you want to pass your capital from the occupational benefit scheme on as an inheritance?
◾ Do you want to have flexible access to your
money?
◾ Do you have knowledge of and experience with
investments?
◾ Are you thinking about single premiums?
◾ Can you see yourself investing in funds?
◾ Do you have health problems, and therefore a
lower life expectancy?
◾ Are your old-age savings from the 2nd pillar
your only assets that you can use flexibly or
invest?
◾ Do you anticipate other sources of income in
addition to the pension from an occupational
benefit scheme and OASI?
A few basic framework conditions
for capital withdrawal
◾ Capital withdrawal amount
Since 2005, the insured can draw at least one quarter of the accumulated compulsory part of old-age
savings as a one-time capital benefit upon retirement. Please refer to the regulations of the respective
employee benefit institution for information about any
other options. At Helvetia, it is possible to withdraw
100% of the capital.
◾ Capital withdrawal after purchase into
the occupational benefit scheme
There is a three-year capital payment prohibition on
tax-qualified purchases. After a purchase, capital may
therefore not be drawn for the next three years. This
relates to retirement benefits, advance withdrawals
for residential property, and cash disbursements upon
termination of employment.
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◾ Taxation
The tax implications as regards capital withdrawals
from the 2nd pillar differ from canton to canton. It is,
therefore, advisable to clarify your personal situation
with the relevant tax authorities in writing before applying for capital withdrawal.
◾ Registration
A full or partial capital withdrawal must be notified in
writing up to twelve months in advance – depending
on the employee benefit institution. Retirees who do
not expressly notify the employee benefit institution
will automatically receive a pension upon retirement.
At Helvetia, the decision about making a capital withdrawal may be made up until the due date of the first
pension payment. At Helvetia there is no registration
deadline for the capital option.
What is particularly important to consider
when investing
In the face of low interest rates, it is becoming increasingly
difficult to invest money in a manner that is profitable,
meaningful and best suited to one’s needs. In addition,
it is important to have the necessary knowledge of and
experience with financial and capital markets when one
opts for capital withdrawal. When investing capital, it is
also imperative to examine the appeal of investing money
in the current interest rate environment vs. an insurance or
banking solution.
What meaningful investment opportunities
are there for capital from occupational benefit
schemes
◾ Single premiums in endowment life insurance with
different payout times as a tax-efficient solution
◾ Purchase of a private life insurance in the form of
a retirement pension
◾ Investment in securities with different maturities
◾ Investment in a broadly diversified portfolio of equities
and funds
12-10853 07.17
Capital withdrawal notification at Helvetia
The form “Capital Option” is available on our website at
www.helvetia.ch/employees (Retirement). It must be completed and submitted before the first regular pension payment.
The written consent of the spouse/registered
partner is necessary; this consent must be officially certified. The certificate of marital status
must be submitted together with the “Capital
Option” form.
What else is there to know
To find out whether you should opt for a capital withdrawal or a pension, it is recommended to have a pension or financial specialist make an overall assessment of
your personal situation.
Our Helvetia Retirement planning team answers any questions you may have. Our experienced advisors will assist
you to make a comprehensive and long-term assessment
of your individual situation.
Further information on retirement planning and a list of
persons to contact for booking your consultation is avail­
able at www.helvetia.ch/retirement-planning.
Helvetia Insurance
St. Alban-Anlage 26, 4002 Basel
T 058 280 1000 (24 h), F 058 280 1001
www.helvetia.ch
Your Swiss Insurer.
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