Points to bear in mind when thinking about unpaid leave

Career breaks or sabbaticals can leave pension gaps. The more time you take out, the greater the shortfalls can be. Take action at an early stage to avoid this situation arising. Here’s an overview of the key points.

OASI

As you don’t receive a salary from your employer during sabbaticals, they won’t make any social security contributions for you either.

This isn’t an issue if you only take three months out: the OASI contribution requirement is met if you’ve worked for at least nine months within a calendar year (at an employment level of at least 50%) and earned a minimum gross income of CHF 4,851.

If you take off longer than three months, you must pay the relevant OASI contributions yourself – otherwise you may end up with a shortfall. It’s important to remember that if you miss a contribution year, your pension will be reduced by around 2.3%.

That’s why it’s essential you register with the OASI compensation fund in your canton of residence as a person not in gainful employment and check any shortfalls. You can then make sure you pay enough OASI contributions.

Pension fund

Gaps can also arise in your pension fund. After all, if no salary is paid, no contributions are made either.

The extent of the shortfall depends on the length of your career break, your salary and your age. That’s because the minimum contributions to the pension fund rise with age.

Contact your pension fund before taking a sabbatical and find out whether you can pay in voluntary savings contributions as an alternative. Otherwise, you can make up the missing contributions by buying into the pension fund.

Pillar 3a

If your unpaid leave lasts for less than one calendar year, you can continue making pillar 3a contributions.

However, if you have no income liable for OASI contributions for a full calendar year (or longer), you cannot make any payments. Existing accounts will nevertheless be kept open.

Good tip: For tax purposes, it’s better to take a longer period of unpaid leave at the turn of the year over two calendar years. This ensures the continuation of OASI and pillar 3a contributions. Progressive tax is also reduced over the two-year period.

Isabelle von der Weid is a pension expert at Migros Bank.