Leaving Switzerland? Consider Our Vested Benefits Solutions

Whether due to unemployment, a career break, a stay abroad, further training or maternity leave. If you’re planning on any of these lifestyle changes then you must transfer your pension fund assets to a vested benefits account.

When do you need Vested Benefits Solutions?

If your annual income falls below CHF 21,510, you are no longer required to pay pillar 2 contributions.

However, this does not mean that you now have free access to the capital that you have saved up to that point. Instead, you must switch over to a vested benefits account with a bank or other financial institution of your choice. In a vested benefits account your occupational pension savings will be safely parked until you resume employment in Switzerland or reach the requirements to access your pension.

If you start working in Switzerland again, you will need to move the money from your vested benefits account to your new pillar 2 account with your new employer’s pension fund.

If you fail to open a vested benefits account, your pillar 2 capital will automatically be paid into an account with the Substitute Occupational Benefit Institution. If you would like to invest your pillar 2 funds in a solution that offers better a returns then you will need to contact Substitute Occupational Benefit Institution.

Situations that call for a vested benefits solution:

  • Planning an early retirement.
  • Taking up self-employment.
  • Giving up work and permanently leaving Switzerland.
  • Taking parental leave, embarking on further training, or in the case of unexpectedly becoming unemployed.

How Swiss Prime International Can Help

We assist you with tailoring the exit management of your pillar 2 funds through the use of the most appropriate vested benefits solution for your situation. We can help you take advantage of a range of benefits if your professional activity in Switzerland is interrupted or stops.

  • Keep as much of your pillar 2 funds as possible.
  • Your transferred pension funds always land where you want them to.
  • Your risk profile is individualized and tailored to your unique requirements.
  • The number of parties you need to work with is reduced to one, saving you time and paperwork.
  • Peace of mind when working with well-established Swiss financial institutions such as: Swiss LifeLiberty Pension FoundationPensExpertLibre Passage UBSCredit Suisse; and others.
  • Taxes are kept to a bare minimum with the most tax efficient exit possible.

Our advisers also provide extensive support and will guide you through the possibilities and limitations associated with transferring your pension savings.

Capital Tax Savings Example: Canton Schwyz

The Jones family moves back to Australia.The husband, Mark (age 45) who worked for 10 years at a pharmaceutical company in Zürich, Switzerland, has a tidy sum of money put away in his pillar 2 pension.

He wants to keep his retirement savings in Switzerland until he is 65 because he likes the stability of the Swiss Franc and wants to avoid any currency risks.

His total vested benefits capital is CHF 500,000.

The tax savings implications, based upon the choice of the withdrawal destination of the pillar 2 funds, are illustrated in the below example which is based on 2018 tax figures:

Mark’s vested benefits capital amount:

CHF 500,000.00

Withholding tax in Canton Zurich:

CHF 40,325.00

vs.

Withholding tax in Canton Schwyz:

CHF 22,825.00

Pension fund payout in Canton Zurich (without deductions):

CHF 459,675.00

Pension fund payout in Canton Schwyz (without deductions):

CHF 477,175.00

Mark’s savings when using the more favourable withdrawal destination:

CHF 17,500

We can help you to maximise your investment and secure your future.

For more information on Vested Benefit Solutions, contact us using the form. A representative from our company will be in touch as soon as possible to answer any questions you may have.