AHV Bridging Pension Tax

Finance, Taxes, Banking, Insurance and Retirement
1

Hi there
Looking for some advice over the weekend.
I have taken early retirement at 60. resident of Switzerland, Kanton Zurich. At my firm we retire normally at 64 and the firm pays the maximum AHV payment (32k) for one year til 65. I received my last pay check yesterday evening and they have deducted the AHV bridging pension tax along with my normal deductions.
Is this correct procedure? That they deduct the tax from something I haven’t yet received?
Obviously I will be contacting our finance department on Monday but wondered if anyone had any info on this before hand.
Problems always seem to raise their head on the weekend.
Thanks in advance
Cheers
Martin.

2

You might need to give details and examples as it is hard to understand.

3

are they going to pay you the one year “bridging pension” anyway now, so you’ll be only 4 years early?

4

Hi,
Maybe, but I understood it would be paid when I am 64 as it is for the period from when I am 64 to 65 and from 65 the regular AHV kicks in. Nothing else has been indicated.
Will have to wait till Monday when I can get to speak to the finance dept.

5

Your explanation is confusing. My take is that your company agreed to pay your AHV (state pension) contributions. They can’t pay out AHV only the SVA (Socialversicherungsanstalt) can do this.

If your company is making up your missed AHV contributions, this is a benefit and is taxable as income. This is quite generous, otherwise you could be making these contributions yourself directly to the SVA…

6

No, from his wording I believe the company are paying him the equivilant of one years’ AHV - hence the CHF 32K which would match the max single pension for 2026 (so including the 13th month). Although as he’s actually retiring at 60 and the payment would appear to be only due in 4 or 5 years there’s no telling what the tax charge is for - or indeed why there is aby tax charge at all. He should ask the company’s payroll people to explain.

Of course he will get nice bills from the SVA for the next 5 years anyway.

7

I thought it’s possible to take early AHV retirement, just accept much lower pension

8

It is - but only from age 63 for the AHV (2nd and 3rd pillars earlier). And you still have to pay SVA until 65.

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9

You even pay AHV contributions on the AHV income you receive when taking it early.

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