I have US citizenship and a vested benefits account with Finpension. Was very happy with this setup until my US tax adviser informed me that all investment products in my Finpension portfolio are classified as PFICs. Apparently there is a PFIC exemption for "classic" insurance backed vested benefits policies but they currently pay ~0% interest.
Did anyone run into a similar problem and find a good solution? Thanks!
Might you mean your 3rd pillar instead of the 2nd? These 3rd pillars that have real investments seem relatively new in Switzerland, but yeah, for a US citizen this is a real problem. PFICs may be taxed at a higher rate by the US than US-based investments, but it seems to be the filing requirements that make it unattractive. The costs of filing the paperwork for the PFIC may surpass the value of even having a 3rd pillar.