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Old 22.08.2007, 10:26
Richard Richard is offline
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Re: Future benefits from back-payments on pensions

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If there are gaps in someones pension contributions, is it possible to make catch up payments, and if so where does this money go ?

The contributions (all persons AHV pillar I, and employers BVG pillar 2) have both and insurance element and an investment element.

If these catchup payments are made now are they going to provide the person future benefits, as opposed to insurance for an event that didnt happen ...?

The answer to your questions:
1. AHV is based on the amount of money you earn and is mandatory. Thus if you have earned in Switzerland it must have been paid. You can check this by requesting an account statement from your "Ausgleichskasse". Given that this is the case and it covers the time you are in Switzerland only I don't see how a "catchup payment" would be possible. What is possible is to continue paying after you leave. If you think about this it makes a lot of sense otherwise a well travelled person would be able to pay tax free into multiple schemes and then claim a "good" pension in total at the end. After all if you check out the minimum and maximum levels in Switzerland with the salaries you will see what I mean. Paying the minimum is very advantageous here.

2. Catchup payments for the BVG are however very possible. In order to do this you need to contact the fund managers of your BVG and request to make a "zusatzlesitung". This is permitted up to the maximum purchase amount as stated on your BVG statement. This is usally at the bottom right. You can make a contribution as high as you can afford. There are certain restrictions though. You are not allowed to make a payment that would leave you with your salary not able to survive ie your income is not permitted to fall under the poverty line allowing you to make or better said make valid, social benefit contributions. ie you are not allowed to use the tax benefits of paying into your BVG to gain state help.
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