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Retirement

A new chapter in life

A new chapter in your life is about to begin and you will soon start using your pension fund assets. You and your employer will decide on the date and make the arrangements. Get advice


All about retirement and statutory benefits in occupational pension plans

Your options
  • Withdrawing retirement benefits as a pension, lump sum, or as a combination of the two.
  • Early retirement (before statutory retirement age)
  • Flexible retirement in stages
  • Deferred retirement
Background

The issue of retirement assets will dominate regardless of how you decide. They are the basis for calculating your benefits as of the retirement date, which therefore becomes the crucial factor in any decision. If you decide on early retirement, for example, you can expect to receive considerably lower benefits because the main portion of your retirement assets accrues in the years closest to retirement as a result, among other things, of increased retirement and interest credits.

Statutory benefits

Start to save early and enjoy the freedom later. From age 25, you and your employer will begin paying regular contributions into your benefits plan so that you will be financially independent when you reach retirement age. For this purpose, the law requires you to have a retirement pension. Moreover, the statutory framework also provides for a child's and survivors' pension in certain circumstances.

Statutory retirement pension

Pursuant to the Swiss Federal Law on Occupational Old Age, Survivors' and Disability Pension Plans (BVG), women are entitled to retirement benefits from age 64; men from age 65.

The benefits amount is calculated based on the retirement assets that have accrued at the time of your retirement. How your benefits are paid out depends on the pension fund regulations and your personal situation. You have three options.

1. Draw a pension

Better protection: Most people opt for a pension from their occupational benefits insurance, which guarantees you a lifelong income. Your accrued assets are converted into a pension on the basis of the conversion rate, which is set by the Federal Council.

2. Lump sum withdrawal

You gain flexibility: Instead of drawing a pension, you can withdraw all your retirement benefits as a single lump sum if the regulations permit you to do so. This gives you additional scope in realizing your plans.

3. Combination of pension and lump sum

You always can withdraw a quarter of your statutory retirement assets as a lump sum. But many pension funds also offer you a combination of the two, which means you can benefit from both protection and flexibility.

Advantages and disadvantages of the combination of pension and lump sum

Child's pension

Perhaps you are drawing a retirement pension and have children who are eligible for support? If so, then each child is entitled to a child's pension of 20% of your retirement pension. Eligibility applies to children

  • up to their 18th birthday,
  • up to their 25th birthday if they are in school or training,
  • up to their 25th birthday if they draw a full disability pension.

Survivors' pensions

No occupational benefits institution can ease the grief of losing a family member. It can, however, help to cushion the impact on your finances. In the event of a death, the pension fund will pay the surviving spouse at least 60% and the orphans 20% of the deceased's pension.

All about the topic survivors' pensions



Pension or lump sum

Retirement: A crossroads that opens up many options for where life will take you. The decision you make depends on your individual requirements and is crucial for your choice of either a pension or a lump sum withdrawal. AXA can offer you a comprehensive overview of the advantages and drawbacks of each option, so that you are well equipped financially, regardless of your choice.

  Pension Capital
Protection
  • Guaranteed pension
  • lifelong

No guarantee that the capital is sufficient to the end of a person's life

Financial freedom Restricted; lump sum at a later time excluded
  • Available flexibly; more scope
  • Customised pension and insurance solutions
Investment activity
  • No expenditure
  • No responsibility
At employee's discretion
 Investment risk
  • No investment risk
Can be considerable, depending on the vehicle 
 Return Irrelevant because the pension is guaranteed. Depends on the investment market and the strategy
Taxes   Fully taxable as income
  • Taxed once at a reduced rate when withdrawn
Consequences for the survivors  Widow's/widower's pension equals 60% of the retirement pension
  • All remaining capital is inheritable

The combined option – the best of both worlds

Perhaps you'd rather keep your options open? No problem. By choosing a combination of a pension and a lump sum you can enjoy the advantages of both options.

Recommendation

Start analyzing your budget situation on retirement at an early stage, while never losing sight of your family and health situation. Would you like professional advice in making this decision? Simply contact one of our pension advisors.



One goal, three solutions

Perhaps you can hardly wait to retire? Are you thinking about reducing your working hours gradually? Or perhaps you find your work so rewarding that you don't want to retire at the statutory retirement age? The decision about when to withdraw from working life is entirely yours, regardless of whether you choose early, flexible, or deferred retirement. Each of these options has consequences as far as your pension is concerned and it's important that you bear them in mind.

Early retirement

No more commuting, no more deadlines, and no more waiting for your vacation to come around. Many of us dream of retiring early.

  • What does the law say?

    Early retirement is possible at the earliest from age 58.

    Contribution payments: The obligation to pay contributions into the pension fund ceases from the date of retirement. For AHV/IV insurance, however, the obligation to pay contributions continues until you reach the statutory retirement age.

  • Your retirement pension

    As a general rule: The retirement assets and conversion rate at the time of retirement are the basis for calculating the retirement pension.

    In the case of early retirement, both these factors are lower, which means that your retirement assets will be smaller too because of the shorter contribution and interest period. And the conversion rate will also be lower because the pension period is longer.

    Result: If you retire early, your retirement pension will be lower – in some cases much lower.

    All about the topic: purchasing pension fund benefits

 

Flexible retirement

A relaxed approach to retirement. Flexible retirement allows you to reduce your working hours gradually.

  • What the law permits

    Flexible retirement is possible between the ages of 58 and 70. You can decide whether you want to reduce your working hours gradually or all at once.

    Conditions
    • Your regulations provide for flexible retirement.
    • You are fully fit for work on the date of the first stage of a reduction.
  • Your retirement pension

    As a general rule: The retirement assets and conversion rate are the basis for calculating the retirement pension.

    The following applies in the case of flexible retirement: For each stage in the reduction, the conversion rate valid at that time of the change applies. If your regulations permit, you can choose at each stage whether you want a pension, a lump sum, or a combination of the two.

 

Pension deferral

Statutory retirement does not seem right at this time because you are still fully engaged in your working life. By deferring your retirement you can stay in your profession and continue to build up your pensions.

  • What the law permits

    You can defer your retirement for a maximum of five years after you reach statutory retirement age.

    However, some organizations do not allow their members to work past the statutory retirement age. Occupational benefits institutions can include a provision on deferring pensions in their regulations.

  • Your retirement pension

    As a general rule: The retirement assets and conversion rate at the time of retirement are the basis for calculating the retirement pension.

    In the case of deferred retirement, both parameters are higher, which means that your retirement assets will be greater too because of the longer contribution and interest period. And the conversion rate will also be higher because the pension period is shorter.

    Result: Your retirement pension will be higher if you defer your retirement.

 

For persons insured with an AXA pension fund

Forms service

Have you decided on regular, early, flexible, or deferred retirement and are you insured with an AXA pension fund? If so, you can simply download the information and forms you need.

Forms service

To access "Forms service", you only need your contract number, which you can find on the personal certificate you receive annually.

Provisional benefits calculation on early retirement

Are you considering early retirement and are insured with an AXA pension fund? Discover what your pension would look like if you were to retire early: Use the online calculator to calculate the future benefits from your occupational benefits plan. The access code is printed on the personal certificate you receive every year.

Online calculation

If you're unable to access the application, you can ask your employer to do the calculations for you.



Frequently asked questions on retirement

The newfound freedom of retirement opens up a world of possibilities – but it also raises questions. AXA Winterthur is there to answer them in detail.

  • Partial retirement
    Is partial retirement an option?

    Yes, partial retirement is possible, provided that this is permitted under your pension fund regulations. We recommend that you refer to the regulations or ask your contact person at the pension fund for further details.

  • Lost benefits due to early retirement

    How much will I lose in benefits by retiring early?

    If you retire early, the retirement capital you accrue will be less than would be the case at regular retirement age because you will be missing contributions and interest payments. In addition, the reduced capital will have to last for a longer period.

    Consequently, the conversion rate and the lifelong pension will be lower. Your pension fund will be happy to work through the various options with you.

  • Pension or lump sum
    When I retire, should I withdraw the accrued capital as a pension or as a lump sum?

    Retirement assets are generally paid out as a pension. If the regulations permit, a lump sum can be paid out instead of a pension. Under the BVG, you always can withdraw a quarter of your statutory retirement assets as a lump sum.
    When making this decision, it's important that you keep your personal and financial circumstances firmly in mind. Do you currently have or expect to have fixed monthly expenses? Are you familiar with investments? Could you cope with a loss on your investments? How important is a guaranteed monthly income?

  • Deferred retirement
    Can I defer my retirement? If so, for how long?

    You can defer retirement for up to five years past regular retirement age, depending on the provisions of the regulations. Doing so would increase the conversion rate and therefore also your pension.

  • Tax on retirement benefits
    How do I declare the pension and the retirement capital?

    All pensions must be declared as income; retirement capital, on the other hand, is subject to a reduced rate in accordance with cantonal rules. We recommend that you contact your local tax office.

  • Monthly retirement pensions
    What payment periods apply to my retirement pension?

    Pensions are generally paid on a monthly basis. However, some pension funds pay them quarterly, biannually, or annually, especially if small amounts are involved.

  • Moving abroad after retirement
    How can I use my occupational benefits insurance if I decide to move abroad after retirement?

    Most pension funds require a paying agent (bank account / postal account) in Switzerland to which they then transfer the pension. How you use the balance on your Swiss account is entirely up to you, irrespective of where you live.

    Tip: Set up a standing order for transferring your pension from your account in Switzerland to an account abroad, perhaps already in the relevant foreign currency.

  • Lump sum withdrawal of retirement assets
    How can I withdraw my retirement capital as a lump sum?

    You will need to contact your pension fund. They will either send you the form you need or inform you about the process and the signatures and documents that you will require.



Explanation of important terms

Conversion rate

The conversion rate is used to calculate the annual pension and comprises a factor for calculating the available retirement capital. The Federal Council sets the minimum conversion rate in accordance with the BVG.

 

Disability benefits
  • Disability pension
  • Disabled person's child's pension

 

Early retirement

Early retirement is possible once you reach age 58, provided that the regulations of your occupational benefits institution permit you to do so. Withdrawing from professional life at an even earlier date is possible only

  • The regulations provide for flexible retirement,
  • You are fully fit for work on the date of the first stage of a reduction.

 

Flexible retirement

Flexible retirement is possible between the ages of 58 and 69 for women and the ages of 58 and 70 for men. Here you can reduce your working hours either gradually or all at once, up to the retirement date. The following conditions apply to flexible retirement:

  • The regulations provide for flexible retirement,
  • You are fully fit for work on the date of the first stage of a reduction.

 

Lump sum option, occupational benefits insurance

When you reach retirement age, you can withdraw 25% of your retirement assets from the mandatory portion of your occupational benefits plan as a lump sum.
If your occupational benefits institution's regulations permit, you can also withdraw all your retirement assets as a single lump sum. To do this, you will need to inform your pension fund before you retire. Your pension fund regulations may specify a notice period.

 

Occupational benefits fund regulations

Every occupational benefits institution issues its own regulations that define the scope of its occupational benefits insurance.
All pension fund regulations must specify at least the following:

  • The range of benefits (e.g. on retirement, disability, death),
  • The way that benefits are financed (e.g. annually, quarterly, payments in arrears),
  • The conditions for entitlement (e.g. duty to provide support),
  • The various pension plans (BVG plan, plan for managers),
  • The various groups of insured persons (e.g. employees, managers).

 

Pension

A pension refers to regular payments made to an insured person for a fixed period or for life.

 

Retired person's child's pension

Persons who draw a retirement pension are entitled to a retired person's child's pension for each eligible child. Eligibility applies to children

  • up to their 18th birthday,
  • up to their 25th birthday if they are in school or training,
  • at the most up to their 25th birthday, and if their disability level is 70% or more.

Minimum BVG requirements state that a retired person's child's pension equals 20% of the statutory disability pension.

 

Retirement age

Retirement age refers to the date on which an insured person is first entitled to receive retirement benefits. According to the BVG, this applies to men who have reached age 65 and to women who have reached age 64.

 

Retirement capital

The retirement capital is the same as the retirement assets at the time of retirement. The projected retirement capital is included in your personal certificate. It is a projection of the available retirement assets and is based on your current pensionable salary, the regulatory retirement credits, and the current guaranteed interest rates.

 

Retirement pension

You can calculate your annual retirement pension by multiplying the retirement assets on the retirement date by the conversion rate on that date.

 

Retirement pension

You can calculate your annual retirement pension by multiplying the retirement assets on the retirement date by the conversion rate on that date.

 



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