Hi,

I was recommended this site for some advice regarding pensions and other financial stuff as my partner and I are leaving Switzerland to work in the US for 18 months. We are both from Wales and have been working summer and winter seasons on an L permit. I have been here for 7 years and my partner 5 years and we'd like to know if we can cash in our pensions as the money would come in really handy for relocating costs. If we wanted to come back and work after that period, would it be possible even though we cleared out our account? Do we have to get an offical document from the Geminde house? I have heard that you get taxed quite heavily on it. How much? Thanking you for all your advice.

Becci

You're talking about 2nd/3rd pillar?
I'm betting that the US has an agreement preventing you withdrawing the cash....

I took my money out of my pension fund.
When you leave your "Gemeinde" you will have to go to the Gemeinde and let them know where you are moving too etc, they will then give you an official document (Wegzugsbescheinigung, I think, not sure of the name anymore).
Then you need to contact the company that has your pension funds and request to have the money transferred as you no long live in Switzerland. Then the pension company will send you some forms to fill in and the money will be transferred.
I am not quite sure how much taxes I paid on the money though, sorry.
When you come back to Switzerland and start with a new pension company, you will always have to option of "einkaufen" (basically putting the missing money) yourself into the pension again. Or if you don't want to do that you can start on 0 again.

When I searched the site for info on pensions I came across the terms pillars. Sorry to be dense, but I don't knwo what they mean. Thanks for replying.

lifted from t'interweb. . .

Article dated August 2000

Abstract:
Switzerland is the first country to have publicly articulated the benefits of a multi-pillar approach to pensions and the first OECD country to have mandated that employers provide occupational pension plans for their employees. Not surprising, the Swiss system has many unique and attractive features.

Queisser and Vittas provide a detailed study of the Swiss pension system, analyzing its strengths and weaknesses.

The unfunded public pillar is highly redistributive. It has near universal coverage, a low dispersion of benefits (the maximum public pension is twice the minimum), and no ceiling on contributions. Low-income pensioners receive means-tested supplementary benefits. Payroll taxes are low, but government transfers cover 27 percent of total benefits. Total benefits amount to 9.1 percent of GDP, equivalent to 15.2 percent of covered earnings.

The funded private pillar was made compulsory in a defensive move against the relentless expansion of the public pillar. The compulsory pillar stipulates minimum benefits in the form of age-related credits, a minimum interest rate on accumulated credits, and a minimum annuity conversion factor, aimed to smooth changes in interest rates over time. Low-income workers are not required to participate in the second pillar. The first and second pillars as well as supplementary benefits are admirably integrated.

Company pension plans are free to set terms and conditions in excess of these minimums, and most offer benefits exceeding obligatory levels. The second pillar has accumulated large financial resources, equivalent to 125 percent of GDP. Investment returns have historically been low, but a shift in asset allocation in favor of equities and international assets has increased reported returns in recent years.

The third (voluntary) pillar covers self-employed workers and others not covered by the second pillar. It plays a rather small role in the system.

Many of the positive features of the Swiss pension system are not due to some grand original design but are instead the result of periodic revisions. In large part they reflect the collective common sense of the Swiss people in voting for stable and fiscally prudent social benefits.

However, the Swiss system also has some weaknesses. As in many other countries, the public pillar faces a deteriorating system dependency ratio, due to demographic aging and a large increase in disability pensions. The second pillar is fragmented (more than 4,000 funds with affiliates), lacks transparency, and has achieved low investment returns.

This paper - a product of Finance, Development Research Group - is part of a larger effort in the group to study pension systems and assess the role of public and private as well as funded and unfunded pillars.

Working Paper Series

I understand new rules are being introduced regarding the ability to take pensions out of Switzerland.

I hold both a UK and New Zealand passport, I would like to ensure that I can take my pension in its entirety out of switzerland when I leave (I would likely leave the EU, however not until 2008 or later.

Can anyone tell me precisely
- what limitations there are on taking out one's pension from Switzerland
- provide more detail on the date of changes to this law

Thanks

There are three pillars, which means three ways of accumulating pension.

1. AHV is an insurance deducted from your salary, something like a government pension plan
2. Private pension, if you are employed your company will pay into this on your behalf
3. Pillar 3a which is a bank account you have to open at the bank and can put money into up to 6.5k-ish per year. This is then deducted from your income so you pay less tax on your income, calculated over the whole year. You cannot get to this savings account unless you buy a house, but have to pay tax on it, and various other rules apply here.

Now one of these is what all the present fuss is about, I think it is pillar 2 but am not sure. I think when you withdraw the money in this pillar should you leave Switzerland before June 2007 you need to pay tax, maybe 7% but again not sure.

Check the following Link for nationals of non-signatory states

http://www.ahv.ch/Commun/10.03-D-F-I-A.pdf

See point 18 on page 52.

It looks like AHV (Old Age & Survivors Insurance or OASI) can be paid out when you leave if you are a resident of a non-signatory state. Page 45 of the document lists the signatory states.

The form for actually claiming the OASI refund when you leave is as follows:

http://www.ahv.ch/Commun/602101-e.pdf

The deductions for AHV are about 5% so can add up if you are here for a while.