I didn't verify this - so make sure to do so with a tax advisor or maybe your bank before doing anything else.... but I vaguely remember that it works like this:
- If you move to a non-EU country you can take the money out of the system
- However, you have to pay tax on the amount you take out (in Switzerland)
- Therefore, what you should do is
1) Transfer the money to a pension account in Schwyz or Zug as they have the lowest tax rate on withdrawals
2) Leave CH and have the money transferred to your new country of residence
There's a company called PensFlex or something similar in Schwyz - look at their website and call them. I had similar questions once and they were quite helpful.
So, going on the post linked to above, the 1st pillar is non-transferable, but is it worth leaving the 2nd pillar behind when we move and can I get it back in case of financial emergency at some point after leaving?
Depends where you are moving to. Restrictions when moving to an EU country. Definitely Swiss taxes on withdrawn amount. Maybe additional taxes in your new jurisdiction.
The concerned foundation is PensFree (vested benefit foundation) which is headquartered in the canton of Schwyz.
The procedure is rougly correct. There are a lot of details which are important to know. Depending on the amount of the vested benefit and the personal situation, there are various possibilities.
A relate issue- I am told that if you become a sole trader you can use your pension as cash too. ok so perhaps a bit risky, see earlier post on this, but I dont have too much faith in pension companies either.
My father retired officially about 7 years ago I think, and his pension had lost a great deal of its value cause the pension company had poorly invested it....
Tax, tax, tax.. when you retire your still going to have to pay tax. Best advice on this BEFORE you withdraw the money move to Zug, where you will pay the lowest tax
I just received the form for "Transfer of Vested Benefits" and yes, there is an option to tick if you are leaving your current employment to become self-employed:
With regards to leaving Switzerland, there are 3 options:
Below says if you move back to the UK say and you do not have to pay into the state pension fund (because you have already made the maximum contribution of 30 years as it is now in the UK) you can just take the cash minus tax at source from your Swiss contributions?
This would be great for me (assuming I go back to the UK) as even though I pay a fortune each month to SwissLife my pot will never be big enough here to generate a decent pension. I would probably have to live to about 120 before I break even.
I am moving/have moved to a EU or EFTA member country and am NOT subject to compulsory State pension insurance. I attest that I will have the competent foreign authorities provide the necessary proof (via official application form to determine social insurance liability - see www.verbindungsstelle.ch (also in english)). I wish to have my full vested benefits paid in cash (subject to tax at source).
But you would still be subject to compulsory State pension insurance, wouldn't you? UK workers who have paid their 30 years STILL have to pay National Insurance and continue funding the communal pension pot, unfortunately.
Would this only apply to people past the state retirement age, perhaps..?
You may be right here. I have paid my max 30 years and expect a full UK retirement pension. I have since as a non resident of the UK been able to stop paying into the state fund.So if I go back prior to normal reirement age and get a job of sorts do I have to start paying into the "communal pot"? This is a good question that needs an answer!
Absolutely, that's a total given. Annoying, isn't it! The change to 30 years was designed to sweep up more people with part-time jobs, missing years due to home responsibilities and so on - full-time working folk just carry on paying, same as before. I've already paid around 15 years and have almost 30 to go until retirement, so I'm not paying voluntary subs at present (I'm not working here, so not currently paying pension subs anywhere). It would be VERY tiresome to pay, say, a decade of voluntary subs then go back to the UK and work for 20 years anyway!
The bit I'm not sure on is whether having the full 30 years satisfies the legal requirement to be 'technically' exempt from social security payments, enabling them to withdraw all their pension fund as discussed above.
I have looked through the consolidated pension doofer but thought I would ask anyway. When I left I had to leave 8000 CHF in a vested benefits thing with UBS. Looking around it would seem that I can get that cash back as it is less than my annual contribution? Let's be honest 8k in chuffs is hardly going to see me through my dotage is it.
I have applied and await the result.....any ideas if I will get the cash? As usual the hyper efficient and helpful swiss refuse to tell me
Thanks for the reply, there seems to be a fair amount of conflicting info out there as the UBS rules state that a cash payment, of the mandatory portion, can be made when the amount is small or when going self employed.
Hi, not an expert but - I've paid my "thirty years" (nearly half as an expat here and in the Middle East, but also some swingeing payments as a relatively high-earner in the UK) so I don't need to make any more voluntary contributions I'm told.
BUT, if I went back to the UK to live (God forbid! :-) ) I would have to pay full NI again - because it's not just the pension fund you're paying into - it's your unemployment and NHS payment as well.... that's my understanding
And anyway, 104 pounds a year is peanuts compared to getting a full pension when you retire - for 30 x 208 pounds (or whatever it is) paid in you get 6000 pounds a year (or whatever it is) until you die - maybe twenty years or more! It's a no brainer. You get it all back in the first year.
No way does it contribute to anything more than a small payment compared to the cost the state is going to make. My only worry is that future governments will legislate this payment away.....
I taught in Switzerland for a year and paid into a pension. I was told that I should take it out if I wasn't going to work there anymore. I was hoping to get another job in Switzerland but didn't and still have a pension there. How can I take it out? I don't know anything about it other than that I paid into a pension while I was teaching there. Thanks.
I am in the process of trying to find all this out as I want to leave Switzerland for good.
Seems you can take your l.p.p 2 eme pilier depending on the country you
go to but not AVS that they keep that until your retirement age, again it all depends on your nationality and the country you are going to..and if that country has an agreement with here..
I was told as a Brit going to Australia, because I was British my AVS would stay here, unless after ex amount of time in Australia I became a citizen then it could be transferred to Oz, and that my l.p.p 2eme pilier could be transferred into a private bank account because I was leaving the E:U.
I found Hotela brilliant they gave loads of good advice by phone, the website is in English as well!