When are voluntary payments to a Swiss pension fund a good idea?

My Swiss employers pension fund allows members to make extra payments voluntarily. Does doing this make sense? Will it help me get a bigger pension?

Hi there,

In Switzerland, you are legally allowed to make voluntary contributions to your occupational pension fund (pillar 2a) to make up the difference between your current contributions and your previous contributions.

Pension fund contributions are based on a percentage of your income, so If you earn more now than you have in the past, you are also making larger contributions.

Example: Your first job contributes 100 francs per month to a pension fund over 1 year. You get a new job after that which contributes 200 francs per month to your pension fund. You can voluntarily contribute the difference of 1200 francs to bring your average pension fund contribution to 200 francs per month.

That benefit of making voluntary contributions is that when you retire, you receive a pension based on your current salary rather than the average of all your salaries. Voluntary contributions to pillar 2a pension funds are also tax deductible.

Each pension fund has its own rules and regulations governing voluntary contributions. Whether you can make voluntary contributions and the limits on how much you can contribute depends on the terms and conditions of your pension fund membership agreement.

Best regards from Moneyguru

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