Swiss Parliament rejects higher taxes on capital withdrawals from the second and third pillar

The Swiss Parliament has decided not to increase taxes on capital withdrawals from the second and third pillars, as previously proposed by the Federal Council.

This so-called Measure 56 was part of the 2027 relief package and was expected to generate approximately CHF 190 million in additional annual revenue for the federal government. Both the National Council and the Council of States have now eliminated this measure.

What is Relief Package 27?

The Relief Package 27 is the federal savings and measures plan aimed at ensuring the Federal Council complies with the debt brake requirements and stabilizes the federal budget starting in 2027. This initiative is in response to anticipated structural deficits. Without countermeasures, these deficits are expected to reach approximately CHF 2 to 3 billion by 2027 and increase to over CHF 4 billion by 2029.

Parliamentary discussions have been underway for some time. The Spring Session of 2026 runs from March 2 to March 20. Initial decisions were already made on Wednesday, March 4. An overview of the decisions regarding individual measures can be found below.

In the ongoing parliamentary process, remaining differences between the National Council and the Council of States will be resolved in what is known as the reconciliation of differences. Following the final votes, the legislative changes will be subject to an optional referendum, meaning a public vote may take place. The adjustments are currently scheduled to come into effect at the beginning of 2027.

All parliamentary decisions to date (in German)

Reliable framework conditions are central for retirement planning

Reliable tax framework conditions are crucial for long-term retirement planning. The parliament’s decision prevents additional burdens for individuals who have built up their retirement capital over many years and have planned their retirement under the existing tax regulations. In particular, this decision provides additional planning security for households approaching retirement.

Lump-sum withdrawals are becoming increasingly important

The decision comes at a time when the behavior of new retirees is visibly changing. More and more people are choosing to withdraw their retirement savings in full or partially as a lump sum, instead of receiving a pension only.

According to data from the Federal Statistical Office, around 29% of new retirees withdrew their retirement assets entirely as a lump sum in 2015. By 2024, this proportion had risen to approximately 45%, which is already close to half of all retirements. Additionally, about a quarter of insured individuals opt for a mixed form, combining partial lump-sum withdrawal with a pension.

Why many opt for a lump-sum withdrawal

The reasons for withdrawing retirement savings as a lump sum upon retirement are varied. Often, it is about financing major purchases or creating financial flexibility for the new phase of life.

Another motivation is the desire to make investment decisions independently. Those who withdraw their capital take on personal responsibility for investment strategy, risk, and returns, instead of leaving these choices to the pension fund – especially if the pension fund’s investment strategy does not align with one’s own preferences. This is even more relevant when the conversion rate – that is, the factor used to convert accumulated retirement savings into a lifelong annual pension – is perceived as too low.

For many, the tax perspective also plays a central role. Lump-sum payouts are taxed separately and at a reduced rate, while pension payments are fully taxed as income over the years. Especially for higher retirement assets, a lump-sum withdrawal can therefore be more attractive from a tax perspective. Any changes in the taxation of lump-sum benefits thus directly impact decisions regarding retirement planning.

The specific tax amount due on a lump-sum withdrawal depends greatly on the canton of residence, the amount withdrawn, and the timing of the withdrawal. With our calculator, you can easily simulate the capital withdrawal tax for your personal situation.

Calculate taxes on lump-sum withdrawals now

A sigh of relief – but the discussion is not over yet

The parliament’s decision to refrain from increasing the taxation of lump-sum withdrawals offers immediate relief and provides planning security for many individuals who have already prepared for retirement. However, this does not mean that the debate about adjustments to the pension system has come to an end.

As part of the upcoming AHV 2030 reform steps, measures that could further influence how individuals transition into retirement remain under discussion. In particular, there is talk of restricting today’s flexibility regarding early withdrawals of retirement benefits. For example, the minimum age for accessing these benefits may be raised, which would limit the ability to retire early.

At the same time, the question of taxing lump-sum withdrawals is unlikely to disappear for good. In future budget discussions and savings programs, lump-sum withdrawals from the second and third pillars could once again become a focal point, as they can be politically considered as a potential source of additional revenue relatively quickly.

Retirement needs careful planning

Today, those entering retirement still statistically have many years ahead of them. The average life expectancy after retirement is around 23 years for women and about 20 years for men. For many people, this means there is nearly a quarter of a century ahead after their working life ends.

This makes it all the more important to carefully and purposefully plan this stage of life. Decisions regarding lump-sum withdrawals or pensions, taxes, asset structure, and sources of income will shape your financial situation for many years. Thoughtful planning helps ensure financial security—so that you do not outlive your savings.

Take advantage of the opportunity to plan your retirement early and in a structured way with us. In a personal pension analysis, we will show you how the choice between a lump-sum withdrawal or a pension, taxes, and asset structure will specifically impact your financial situation.

You will receive a clear basis for decision-making: which withdrawal strategy makes sense, how taxes can be optimized, and how your assets can be structured to last throughout your retirement years.

No Tax Increase on Capital Withdrawals: What This Means for Pension Planning