Limitation of Buy-Ins for a Foreign National – Compatibility of OPP 2 with the AFMP

Judgment 9C_430/2023

A French national born in 1964 settled in Switzerland as a Chief Financial Officer.

He made several buy-ins, but the last one for CHF 250,000 was rejected by the pension fund because it exceeded the limit of 20% of the maximum insured salary, which amounted to CHF 860,040.

Following the rejection of his claim by the cantonal court, he filed an appeal in public law matters. His main argument was that Article 60b paragraph 1 OPP 2 contradicts the Agreement of 21 June 1999 between the Swiss Confederation, of the one part, and the European Community and its Member States, of the other part, on the Free Movement of Persons (hereinafter abbreviated as AFMP).

The Federal Supreme Court recalled the content of Article 60b paragraph 1 OPP 2. According to this provision, the annual buy-in amount paid by persons arriving from abroad who have never been affiliated with a pension institution in Switzerland must not exceed 20% of the insured salary, as defined by the pension plan regulations, during the five years following their entry into the Swiss pension institution. Upon the expiry of the five-year period, the pension institution must allow an insured person who has not yet bought in the totality of their regulatory benefits to proceed with such a buy-in.

Our Supreme Court dismissed the appeal, reiterating that the aforementioned provision limits the annual buy-in amount both quantitatively (20% of the insured salary) and temporally (five years) for persons arriving from abroad who have never been affiliated with a pension institution in Switzerland.

According to the Federal Supreme Court, the unequal treatment that Article 60b paragraph 1 OPP 2 may entail is justified as a mechanism aimed at ensuring the coherence of the tax system and complies with Article 21 paragraph 3 AFMP.

Strictly speaking, a foreign national who settles in Switzerland for the first time for a period of one year, then leaves for their country of origin or another country for, say, six months, and subsequently returns to Switzerland, would no longer be subject to this 20% limitation for 5 years, insofar as they have already been affiliated with a pension institution in Switzerland.

That being said, one can legitimately raise the question of an abuse of rights if this person, after a brief initial stay in Switzerland, remains abroad briefly and then returns to work in Switzerland for the same employer, still affiliated with the same pension institution.

Given the purpose of Article 60b paragraph 1 OPP 2, which is to prevent tax avoidance, one might wonder whether, in such an instance, a court would not favor a teleological interpretation, even though it should not do so inasmuch as a literal interpretation is sufficient.