What happens to my pension fund if I leave Switzerland?



Are you concerned about the pension refund consequences that might apply to leaving Switzerland? This is a valid question to ask, and there are some key factors to take into account.

What will happen to this refund if you leave permanently? Can you still obtain cash payments? Is there any way to retain this type of coverage even after you have left? These are some of the issues that we will address below.

Leaving Switzerland Pension Refunds: What are the Fundamentals?

According to recent Swiss statistics, the average monthly occupational pension value is 1692 CHF. These values tend to be the highest for those who receive payments before the legal retirement age (65 years for men, 64 for women).

We can see that such funds will obviously provide a much-needed source of liquidity. However, what if you will soon be relocating outside of Switzerland? How will your refunds be affected? Let’s look at the fundamentals before moving on.

Leaving Switzerland and Pension Refunds: Can They be Claimed?

It is firstly important to address the most logical question. Can a pension refund be paid out in cash if you are permanently leaving Switzerland? Thankfully, the government provides you with this option. Nonetheless, the outcome will depend on where you are relocating to.

As this article points out, those who are moving to a non-EU country will not encounter any restrictions. In other words, they can withdraw the assets associated with their pension funds. What if you will still be living in the EU? In this case, you will not be able to access the LLP portion (Mandatory part) until you reach the age of 60, 59 for women. The extramandatory part however is available anytime.

In either case, it is first necessary to provide proof that you have deregistered with your Swiss-based municipality. Note here that the benefits will be subsequently taxed at the source. In addition to those whose residency is unclear, this applies to those who have already completed the deregistration process.

What About a pension that is Left in Switzerland?


What would happen in the event that a pension is not claimed when leaving Switzerland? In this case, the funds will remain within a vested benefit account. Keep in mind that the subsequent investment opportunities will normally be curtailed. This is why withdrawals are often preferred.

The Mechanics of Cash Pension Withdrawals


Many individuals wish to withdraw their pension refund in the form of cash. Those who are married will need to obtain the consent of their spouse. Likewise, individuals who are single will be required to present official proof of their unmarried status.

Once again, it should be noted that withholding taxes will apply to those relocating to a non-EU country. The amount of tax will correlate with the canton where the original pension is held. This is also known as the “domicile of the foundation”. More details can be found by reading this informative post. This is why I recommend transferring your assets to a canton with low taxes.

Can You Maintain Your Swiss-Based Pension Refund?

There may be times when you decide to leave your pension intact even after relocating. For instance, perhaps you wish to explore investment options before making a cash withdrawal and paying withholding taxes. This is also a possibility.

There are three ways in which this coverage can be retained:

  • To place the funds within a domestically recognized vested benefit Foundation, preferably with domicile in a canton with low taxes
  • I recommend to NOT register with the Substitute Benefits Occupational Benefits Institution (known as the Stiftung Auffangvorrichtung BVG): Interest 0.01% and no investment options.
  • Don’t let your last pension fund transfer your assets to the above mentioned Stiftung Auffangvorrichtung BVG, you should ask me what’s the best solution…

These methods are even more relevant if you have performed any buy-ins over the past three years. As they cannot be paid out in the form of cash, they will be automatically transferred into a vested account.

Planning for the Future

Planning for the Future

We can now see that there are numerous possibilities to make the most out of your pension refund. While some may choose to keep these funds intact, others wish to embrace a more proactive approach. For instance, it is often possible to reinvest pensions into tax-efficient bundles associated with another country.

It can still be difficult to know where to begin. Thankfully, Chevrolet Consulting GmbH is always here to help. Our team has provided advice to more than 300 clients from all walks of life. You may even be able to reduce your tax obligations by as much as 50 per cent.

Are you curious to learn more? If so, contact us in order to schedule a free initial consultation. With our help, making the most out of your pension refund will soon become a reality.