Releasing accumulated pillars
Releasing accumulated pillars
"Unemployed and suffering from a serious illness, I was recognised as disabled by 100%. When I became ill, I was not contributing to an occupational pension scheme, so no supplementary invalidity pension is paid to me. However, I had previously accumulated occupational pension capital and paid into a 3rd pillar insurance scheme without risk premium. Can I request the release of the 2nd and 3rd pillar capital I have already accumulated?
Isabelle, Geneva
Pension provision is made up of three pillars. The 1st pillar consists of old-age and survivors' insurance (AVS), disability insurance (AI) and supplementary benefits. Its aim is to guarantee beneficiaries a minimum standard of living in the event of disability, death or retirement. Anyone living or working in Switzerland contributes to this scheme from the age of 20 at the latest until retirement. The 2nd pillar concerns occupational pension provision (LPP) and is compulsory for all employed persons. Finally, the 3rd pillar is a voluntary savings scheme, also intended for pension provision, which can be supplemented by a risk insurance contract (invalidity or death).
All persons are entitled to an AI pension (1st pillar) if their earning capacity or ability to perform their usual tasks is reduced as a result of a permanent or lasting impairment to their health, unless the same objective can be achieved by a rehabilitation measure. In addition, a supplementary pension (2nd pillar) is granted to any person whose disability is at least 40%, provided that, at the time of the cause of the disability, the person was gainfully employed and paying LPP/BVG contributions. If this is not the case, it is still possible to request the release of the 2nd pillar retirement capital provided that the disabled person is receiving a disability insurance pension of at least 50%.
With regard to the 3rd pillar, early payment of retirement benefits is possible if the insured person receives a disability pension from 100% and the risk of disability is not covered by this insurance, subject to other contractual conditions.
Therefore, if you had not accumulated any LOB assets when you fell ill and are therefore not receiving a supplementary pension, you can apply to the occupational pension scheme with which your LOB assets are held, and to your 3rd pillar insurer, for your retirement capital to be released, after checking your insurance contract. The Invalidity Insurance decision recognising you as 100% disabled must be attached to your requests. That said, it would be preferable not to request the release of all your assets in the same year, to avoid a significant increase in tax.
