PensSplit
Divide up your retirement lump-sum capital with PensSplit and reduce your tax burden.
How you benefit with PensSplit
Staggered withdrawal: With two separate vested benefits accounts, you can access your vested assets in several steps instead of having them paid out all at once. This gives you control over the timing and amount of withdrawals and allows you to plan your financial future in the best possible way.
More flexibility in your investments: Splitting gives you two separate vested benefits accounts. This allows you to select an individual investment strategy for each portfolio – tailored to your personal objectives, risk tolerance and long-term financial planning.
Tax savings: By withdrawing your pension assets in several tranches in different years, you can break the tax progression and thus significantly reduce your tax burden upon withdrawal. As long as the pension assets remain in the second pillar (vested benefits account), no wealth tax is payable. Likewise, interest and dividend income are not subject to income tax.
Liquidity: In addition to the tax benefits, many customers also appreciate the additional flexibility when it comes to making withdrawals. Splitting means that the actuarial capital does not have to be withdrawn all at once, but can be paid out in two tranches – exactly when it is needed.
What is splitting?
When you leave the pension fund, you have the option of dividing up your vested benefits capital and transferring it to two different vested benefits institutions. With its two foundations, PensSplit offers splitting from a single source – starting from vested benefits of CHF 300'000.–. The split will be carried out by your pension fund, which will receive the relevant transfer instructions from us.
How does PensSplit work?
When you leave a pension fund, the vested benefits capital you have saved up is transferred to one or more vested benefits accounts. By law, a maximum of two vested benefits accounts may be opened.
Instead of transferring the entire capital to a single account, it can be divided between two different vested benefits foundations or accounts. The exact breakdown can be determined individually, as long as both accounts use different vested benefits institutions.
As you now have two vested benefits accounts, you can select a separate investment strategy for each account. In this way, different risk profiles or maturities can be used, for example.
Upon withdrawal of pension assets, the tax is calculated progressively – the higher the amount withdrawn in a year, the higher the tax rate. Splitting allows you to withdraw the funds in stages over several years, thus reducing your tax burden.
The pension fund takes care of the technical implementation of the split and transfers the capital to the two vested benefits institutions chosen in accordance with the transfer instructions.