Pillar 2 Voluntary Buy-in: Who Qualifies and What You Get
Learn how making voluntary contributions to your pension can reduce your taxable income, and understand the rules regarding fund accessibility.
The Pillar 2 Voluntary Buy-in allows you to make extra payments into your occupational pension fund to make up for previous gaps in your contributions.
Who it's for
This scheme is for employees who have gaps in their pension fund contributions and wish to increase their retirement savings.
What you get
By making these voluntary contributions, you can achieve a significant reduction in your current taxable income. This helps lower your overall tax burden for the year.
What it costs you
The primary cost is your own cash liquidity. When you make these payments, the money is moved into the pension system and is no longer available for your daily spending or other investments.
The catch to know
Once you have made a voluntary buy-in, you cannot withdraw those specific funds as cash for at least 3 years.
How to apply
- Check your pension certificate to identify any contribution gaps.
- Contact your pension fund provider to calculate the amount needed to fill the gaps.
- Coordinate the payment with your provider.
- Ensure you receive documentation to claim the tax deduction.