Note for orientation

The following remarks refer to the current draft by the Federal Council regarding an increase of the earliest possible retirement age in occupational pension schemes. The parliamentary process is still in its initial stages, and corresponding amendments remain possible. However, the fundamental direction – setting 63 as the new minimum age for retirement – is already clearly apparent. It therefore makes sense to start proactive retirement planning today.

The discussed increase in the minimum age for withdrawals from the second pillar from 58 to 63, as well as a planned deferral of the earliest age for withdrawals from pillar 3a from 60 to 63, would significantly alter the retirement framework.

Regardless of the final wording of the law, one thing is clear: Flexibility for early withdrawals from pension plans will be significantly reduced. As a result, retirement planning is shifting away from short-term decisions toward a forward-looking, strategic and tax-optimized approach.

Why the rules might change

The Federal Council’s draft aims to ensure the long-term financial stability of the pension system and to extend the working years. Early retirements are intended to become less attractive, and pension assets should remain in the system for longer.

The following key points are already apparent:

• Increase and standardization of the earliest possible age for withdrawals

• Restriction of individual special arrangements

• Reduction of the current flexibility regarding early lump-sum withdrawals

Even though the parliamentary process is still ongoing, there are many indications of a permanent structural shift.

From 58/60 to 63: What's becoming apparent

2nd pillar (pension fund)

In many pension funds today, retirement benefits or lump-sum withdrawals are possible as early as age 58 or 60, depending on the respective regulations. The current draft legislation proposes to lift the earliest possible withdrawal age to 63.

If this legislation is implemented, traditional early retirement options would be significantly restricted, regardless of industry or employer.

Pillar 3a

Currently, withdrawals from pillar 3a are permitted from age 60 under certain conditions. The draft legislation seeks to increase the earliest withdrawal age to 63.

There is no clarity yet regarding the latest possible withdrawal age. What is clear, however, is that the previous window for staggered withdrawals will be shortened at the front end.

Who is affected?

The planned changes are not merely abstract. In particular, they impact individuals who have already planned or partially prepared for retirement. The new situation is particularly relevant for:

• Individuals planning to retire between 60 and 62 years of age, whether through full retirement from employment or partial retirement.
• Individuals who have structured their retirement planning based on the current legal framework, for example through early buy-ins to pension funds, planned lump-sum withdrawals, or coordinated arrangements in pillar 3a.

For these groups in particular, increasing the minimum withdrawal age could lead to unexpected funding gaps, higher tax burdens, or a need to adjust existing life and retirement plans, often without these risks being immediately obvious.

Tax progression: A key risk

Lump-sum payments from:

• Pension funds
• Vested-benefits foundations
• Pillar 3a

are taxed separately but progressively at the cantonal level.

What's decisive: All lump-sum withdrawals made in the same calendar year are aggregated and taxed together.

The shorter the available withdrawal period, the greater the risk of capital accumulation and thus significantly higher one-time tax charges. This risk exists regardless of the specific details of the Federal Council’s draft.

Rethinking pension planning: Anticipate, don't react

The new backdrop shifts the focus from spontaneous early retirements to early, systematic planning. Particularly for individuals in their early to mid-fifties, there are still valuable opportunities to take action.

Key elements of professional retirement planning include:

Married couples in focus: Coordination is becoming essential

Lump-sum payments received by both spouses in the same year are combined for tax progression purposes. Uncoordinated withdrawals, for instance simultaneous 3a payouts combined with a lump-sum withdrawal from a pension fund, can result in an unnecessarily high tax burden.

Regardless of the law, it is essential for married couples to plan retirement decisions together and over multiple years.

Tools and options providing greater flexibility

Consider partial retirement

If allowed by the pension fund regulations, partial retirement enables a gradual transition out of employment. This approach improves liquidity, flexibility, and tax timing.

Bridge financing until age 63

People wishing to reduce work percentages earlier will need to rely more heavily on assets outside of tied pension schemes (pillar 3b, securities, cash). Careful planning helps prevent unfavorable early withdrawals.

Tax-optimized staggering

Even with a narrower time frame, staggered withdrawals remain important:

• Keeping several 3a accounts
• Staggered withdrawals of vested benefits
• Careful coordination of a potential lump-sum withdrawal of pension-fund savings

How smzh ag provides support

Especially in phases of regulatory uncertainty, the value of forward-looking, holistic advice becomes evident. smzh ag assists insured individuals, couples, and companies in preparing well for various scenarios, without having to rely on a single legislative decision.

Conclusion

Even though the Federal Council’s draft has not yet been finalized, the direction is clear. Early withdrawals are likely to become more restricted, planning horizons are becoming shorter, and tax risks are increasing.

Those who begin their retirement planning today gain valuable flexibility, regardless of the specific outcome of the parliamentary process. Retirement planning is therefore becoming a key strategic, ongoing task.