PENSION PLANNING · 4 min read

LPP buy-in: the most powerful tax deduction after pillar 3a

Published 21 July 2026 · Updated 21 July 2026

Changed employer, got a raise, taken a break or lived abroad? Then your pension fund probably has a "gap" — the difference between your current savings and what you would have if today's salary had always been insured. You can close that gap with a voluntary buy-in. And every franc paid in is fully deducted from your taxable income.

Why it is so tax-efficient

Unlike the 3a, an LPP buy-in has no fixed annual cap: the limit is your total gap, often tens of thousands of francs. Illustrative example: a buy-in of CHF 20'000 at a 30% marginal tax rate cuts your tax bill by about CHF 6'000 — in the very year of payment.

The strategy that maximises the effect

• Stagger rather than pay in one go: three buy-ins of CHF 20'000 over three tax years each deduct at the full marginal rate — more effective than a single CHF 60'000 buy-in that "flattens" the progression in one year.
• Target the high-income years: bonus years, years without unpaid leave, the final career years — that is where the marginal rate (and therefore the saving) is highest.
• Coordinate with a future lump-sum withdrawal: withdrawals are taxed at a reduced, separate rate; buying in between 50 and 60 and withdrawing at retirement is often the most attractive window.

The 3 traps to know before paying in

• The 3-year lock-up: any lump-sum withdrawal within 3 years of a buy-in triggers the clawback of the tax deduction. Do not buy in if a withdrawal is coming up (property, leaving Switzerland, retirement as capital).
• Your fund's health: check the coverage ratio (ideally above 100%) and the interest credited on the extra-mandatory savings before paying in large amounts.
• The money is locked until retirement: keep an emergency fund and your medium-term projects outside pension savings first. A buy-in only makes sense with surplus savings.