Job Finished - Pension Pot advice please

Finance, Taxes, Banking, Insurance and Retirement
1

Dear Friends

Yesterday was my last day at work after 9.5 years. Today is day one of the new chapter in my life.

This morning I received a letter from my pension provider AXA asking what I want to do with my pension pot.

I am registered with RAV since receiving my termination at the end of February. I am 57 and 58 at the end of September.

The letter tells me I have these options:

  1. If I am starting a new job (I’m not) to transfer to the new pension provider
  2. Not starting a new job - transfer to Vested Benefits account
  3. Cash payment if I am self-employed or leaving Switzerland (I’m not)
  4. I am 58 and wish to retire
  5. I am 58 and wish to continue my benefits insurance

The letter tells me that if I don’t reply within 6 months the money will automatically transfer to Stiftung BVG.

Does this mean if I wait a few months until I hit 58 that options 4 or 5 would be available to me? Is there a preferred Vested Benefits account other than Stiftung BVG?

Any advice greatly appreciated. Many thanks

2

Hello,

I have been in the situations 1 and 2.

  • Situation 1: end of job I got this letter from 2nd pillar savings institution. For sake of simplicity, I requested a transfer to a vested benefits account from UBS since I’m already customer there. If the savings are above a minimum threshold, the account is free. Quite probably you meet this threshold after 9.5 years of work.

  • Situation 2: I got a job 4 months later. I waited the 3 months of trial period and then I requested a transfer from UBS vested benefits account to the 2nd pillar institution of my new employer.

My wife has used the Migros vested benefits account to hold temporarily the 2nd pillar savings. Basically the same as UBS. I guess almost any bank offers this service since you’re bringing money you cannot use.

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At that age I believe there should have been another option - stay in your employer’s fund, which is often the best option.

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Congratulations on retirement!

  1. If you want an annuity, check what the conversion rate is and if you can stay in your pension fund to collect the annuity.
  2. The annuity rate offered by pension funds are generally much better than what you can get on the market so if you want an annuity don’t lose this option
  3. If you want to withdraw as lump sum, you also have another golden opportunity to split the pension fund into 2 (possibly more) vested benefit accounts. With modern providers like VIAC and Finpension, you can have these more flexibility in your investments including investing in the stock market for higher risk and higher return.
  4. Splitting into multiple VB accounts can give you flexibilty in how you cash out the VB accounts and can be a way to reduce your taxes on cashing out.

As you have short time to take action and this is a high impact decision, I suggest you research this well.

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We took advice from our tax accountant on going down the route of moving the funds to Schwyz. He put us on to a firm with an office in Basel who could organise everything and OHs employers sent him the relevant paperwork which we completed and took to Baselstadt Immigration to have our signatures witnessed and get the official stamp done. Cost us 30f.

The following week OH got a letter from his employers to say they wouldn’t permit him move the funds for 2 reasons :-

i - he hadn’t sought another job whilst he was still aged 64 (bear in mind he only had a few weeks warning he was retiring so we had to work on bringing personal plans forward first).

ii - it was not possible as he was about to turn 65

To add insult HR sent him a letter thanking him for his work within the company but they got his length of service wrong :rofl:

You’d think this is some sort of tin pot outfit, but it’s a huge global concern. It’s like being told thanks but you can just eff off now :angry: