On 2 October 2024, the Zurich Cantonal Tax Office published a practice note setting out new requirements for the recognition of partial retirement.
The AHV 21 reform aims to make retirement more flexible, allowing for a gradual transition into retirement and enabling people to stay in the workforce longer. Partial retirement under the BVG has been legally regulated, allowing pension benefits to be drawn in up to three steps. This regulation offers tax advantages, as distributing pension withdrawals over multiple years can reduce the tax burden due to progressive taxation. The Canton of Zurich has retroactively adjusted its practice, now allowing three partial retirement steps and lowering the minimum workload reduction to 20%. A permanent reduction in workload remains necessary, and careful planning is still required.
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