Need help.

The rules of my new Swiss employer's pension fund scheme quotes a Swiss Federal law requiring my current pension fund assets AND any prior personal vesting retirement fund accounts to be liquidated and transferred to said Swiss pension fund's UBS bank account.

Huh? Why haven't I heard any mention of this before? I am living in South Africa at the moment, and I can see a ton of regulatory problems on the horizon, not least of which is the large local tax that retirement fund liquidations attract. The other thing is I would prefer not to do it.

Does everybody who relocates to Switzerland and becomes a member of a federally registered employer pension fund (I presume), have to transfer their accumulated foreign pension fund assets to the new Swiss fund?

I don't think they can ask for your foreign investments, but all your Swiss pension funds should be transferred to your future employer's fund, that is normal.

Gee whiz, the language in my employer's pension fund rules don't state any exceptions, be it foreign/local source or whatever. Any certainty on the scope of this Federal Law?

I have a UK based pension scheme with my company and have had for the 15 years I have been employed. When moving to Switzerland 6 years ago, I didn't have to move my assets, although upon granting of my C permit, I did have to make mandatory minimum contributions to the 3rd pillar.

I don't know if there is such a law now, but certainly hasn't impacted me

I guess you mean 2nd pillar (BVG) - 3rd pillar is always optional and nothing to do with your permit or employment (other than which limit 6k, 30k approx. applies).

Correct - sorry

nonsense
you can leave it where it is. there is no compulsion to move it. i have my UK pensions set up and there was never any question of transfer. it does not make any sense

Hi Peet

Good luck for the move. I can only share my experience as a South African who moved over here last year.

If your pension is in South Africa, it's quite likely that you won't be able to simply move the funds into your new Swiss employers fund. I wasn't able to do that, not due to my new Swiss employer, but because of the pension regulation in South Africa.

So my choices were to either keep the funds in South Africa and stop contributing, or withdraw and get hit with tax but at least have the funds. I think that'll probably be the same bridge you'll have to cross here. I don't know much more about your own personal circumstances or how close you are to retirement - but if there's a substantial amout there, and you do intend on finally returning back to SA, I'd suggest leaving your pension where it is.

And as for the bit about your new employer saying that all prior funding needs to go into the new pension - sorry man but that's bs. That's only enforceable if you'd previously contributed to a Swiss pension fund, and even then it's only enforceable for the pension contributions you made into a Swiss company pension fund. Even for employee working in the rest of Europe, you'll normally have the option of transferring your previous contributions into the new fund, but it's definitely not mandatory.

If you're intending on finally retiring in Switzerland, it becomes a different story in terms of getting the most out of your second pillar (read this one to understand it a bit more Swiss pensions consolidated summary), but if you're only going to be here for less than 5 years and not retire, I wouldn't bother. The taxes you'll pay on liquidating your benefit aren't recoverable (22% over the first R200 000 if I remember correctly).

Hi everybody!

I emailed the pension fund management company to clarify and I can confirm that the Federal Law they quote is only applicable to pension funds that has been accumulated while working in Switzerland.

There was no explanation of this in my new employer pack. Very unprofessional - very unSwiss.

Thanks for all the helpful replies.

One more thing -- while it is a legal requirement to transfer your (Swiss-accrued) pension fund balance to your new employer, I've been advised by an investment advisor (not one of The Unmentionables -- someone who actually had training and experience) that this requirement is not easily enforced and many people in Switzerland don't transfer their "old" pension balances. Instead, they move their balance from their former employer's fund and invest it in the appropriate vehicle at a bank or life insurance company. This spreads the risk a little.

Up to you. (Well, not the OP; but anyone with Swiss pension savings who is looking to move jobs.)

I think your comment is a unfair. Swiss pension fund law is there to protect Swiss funds in Switzerland, isn't that obvious? It's not unfair, it is in my view the way you are reading this. Without Swiss law, the company pension fund could be raided by the employer, as often happens in Britain. Does South Africa have laws protecting old funds from being taken over by new managements?

No no no, you are misunderstanding me. My tongue-in-cheeck comment about being unprofessional and unSwiss was directed at the lack of explanatory documentation that specified to whom the pension fund transfer instructions are appliccable. In my prior experience the Swiss leave nothing open to misinterpretation.

Hi,

It's not true that UK company pension schemes are often raided by the employer, UK law prevents it. In 1 case it happened however it was against the law. The company does not control the assets of the pension scheme.

Many UK final salary pension schemes are underfunded, that is another story, partially because people are living longer than when the promises were made.

CH schemes seem to be defined contributions, a very different animal as the entire 'risk' is borne by the employee.

Agreed. British pensions have only been safe since 2004,

http://en.wikipedia.org/wiki/Pensions_Act_2004

Remember Robert Maxwell who stole the Daily Mirror company pension scheme?

http://en.wikipedia.org/wiki/Robert_Maxwell

http://www.independent.co.uk/news/bu...s-1391284.html

Ittigen,

Do you still think my comment is unfair?

Unfair insomuch the Swiss pension fund told you to transfer money to their fund.

You wrote unprofessional and un-Swiss: but the pension funds are following Swiss federal laws, so behaving quite the opposite to your statement.

I really don't want to start splitting hairs, I still think your comment was unfair.

Ittigen,

Yes, U wrote unprofessional and unSwiss; No, I was not referring to the pension funds. Do you get that?! Geez! I said the it was unprofessional and unSwiss of my employer not to add an explanation that the rules are only applicable to Swiss pension funds. What's so hard to understand?

Did you even read my follow-up or are you just rambling on?

OK, OP is now talking to him/herself. Time to wind this up.