Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #41  
Old 05.05.2008, 20:57
muze7's Avatar
Forum Veteran
 
Join Date: May 2006
Location: Uk now
Posts: 1,206
Groaned at 3 Times in 3 Posts
Thanked 145 Times in 91 Posts
muze7 is considered knowledgeablemuze7 is considered knowledgeablemuze7 is considered knowledgeable
Re: Freizuegigkeitskonto [vested benefit account]

Ok, the way I understood it is this. Your employer pays a certain amount, 10.4% I think. This goes into a separate pot. However, when I get my annual statements, the employer amount is hidden. When I asked my fund about the amount that goes into a Freiz. account when my job finishes, they explained the rules about the amount you get that depends on your age, which is in addition to your own contributions, as outlined before.

This amount, whatever it is, is paid from the employer pot. Now if you are 45, this is 100%, but not 100% of the employer pot, but 100% of what you paid in. That is what the rules say. So there will be some left in the employer pot if you are 45 or younger, and this goes to the pension fund, not to you.
Reply With Quote
  #42  
Old 05.05.2008, 21:16
Member
 
Join Date: Jan 2008
Location: Switzerland
Posts: 115
Groaned at 3 Times in 3 Posts
Thanked 0 Times in 0 Posts
Info has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

Thanks for your very clear explanation.

In other words, if my total contribution is X and my employer's total contribution is Y, when I leave at 40 , I get 180%X which is nothing but (100%X + 4%(40-20)X)

Am I right?


P.S - BTW, This link (in English!) is very useful in this context and see the section statutory minimum which substantiates this

http://www.swisslife.ch/etc/slml/slc...tsgesetz_e.pdf
Reply With Quote
  #43  
Old 09.06.2008, 15:45
dannyt986's Avatar
Forum Veteran
 
Join Date: May 2005
Location: Wollerau, Schwyz
Posts: 1,820
Groaned at 26 Times in 19 Posts
Thanked 717 Times in 479 Posts
dannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond repute
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
Very surprised that those younger than 45 cannot repatriate the full super-obligatory part! Sounds very arbitrary and unjust. I was convinced that vested benefits are fully portable, which is why it is called "Freizügigkeit":

What is the source of your info?
Can you quote the pertinent Law and § which restrict repatriation?
This is also news to me, and I would take with an ample pinch of salt. It might be a specific provision of muse7's employers plans, but I havent heard of a statutory provision to this effect.

EDIT: Maybe no salt required after all. Although I have a statement as of 1.1.08 when I was 40 showing "avoir de veillesse" X and "prestation de sortie" Y of about 86% of X. I have asked to understand the calculation.

Daniel

Last edited by dannyt986; 09.06.2008 at 16:10.
Reply With Quote
  #44  
Old 09.06.2008, 17:10
Member
 
Join Date: Nov 2007
Location: Geneva
Posts: 190
Groaned at 0 Times in 0 Posts
Thanked 13 Times in 13 Posts
wildboar has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

I raised this question in the beginning and then verified the reply of muze 7 as per my pension plan. To my surprise, I found the same thing in my pension plan but with an additional point. I explain:

My policy says that the prestation de sortie (or libre passage)
- is everything accumulated over years - X+Y+interest (l'avoir de vieiliesse +interest)
- should be AT LEAST my contributions (X) +interest + 4%(my age -20)*X (max is 100%)
The article quoted is 17 of FZG and not 7 as mentioned by muze7 earlier (muze, was is 7 in your policy or 17?)

Means, if your company has more contributions than yours, you would never fall under the second condition....
Reply With Quote
  #45  
Old 09.06.2008, 17:56
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
Ok, I found some more info on this. Perhaps you have a different type of pension fund than I do. According to Saldo Ratgeber (Gut Vorsorgen by H. Stauffer) two main types are Leistungsprimat and Beitragsprimatkasses.
Translation for those not familiar with pension insurance German:
Leistungsprimat = "Defined Benefits" (DB)
Beitragsprimat = "Defined Contributions" (DC)

DC is simpler to understand and process. You contribute. Your employer contributes. And when you quit, you take the pot with you.

DB is an obligation for the employer to pay you a pension, when you retire, based on your final salary. So you contribute. The employer has a future liability. When you quit, some actuarial calculations are needed to determine the present monetary value of your vested benefits.
Reply With Quote
  #46  
Old 10.06.2008, 10:30
Member
 
Join Date: Nov 2007
Location: Geneva
Posts: 190
Groaned at 0 Times in 0 Posts
Thanked 13 Times in 13 Posts
wildboar has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

Pension paid after your retirement is not dependant on your final salary but on the accumulated retirement assets you have. There’s some conversion factor which is multiplied by your retirement assets to provide the final figure that you would get as monthly pension after your retirement. This conversion factor varies – don’t really know how but it changes with years.. So you can’t calculate in advance how much you would get at your retirement with a projection on your retirement assets.
Reply With Quote
  #47  
Old 11.06.2008, 11:56
dannyt986's Avatar
Forum Veteran
 
Join Date: May 2005
Location: Wollerau, Schwyz
Posts: 1,820
Groaned at 26 Times in 19 Posts
Thanked 717 Times in 479 Posts
dannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond repute
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
This is also news to me, and I would take with an ample pinch of salt. It might be a specific provision of muse7's employers plans, but I havent heard of a statutory provision to this effect.
So I have checked it out with my employer. This is indeed the statutory minimum transfer value, but many companies (including Im happy to say mine) have better than the statutory minimum benefits and the full accumulated benefits are transferred.

Daniel
Reply With Quote
  #48  
Old 21.06.2008, 16:48
Newbie 1st class
 
Join Date: Apr 2007
Location: Zurich
Posts: 20
Groaned at 0 Times in 0 Posts
Thanked 2 Times in 1 Post
ngina has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

After my last job/redundancy earlier this year I received my pension lumpsum which had to be transferred to the above F...........konto as well. Is it really possible if I wished to withdraw/transfer this money if I so wish....Why is it compulsory blocked until I retire? I could chose to invest it differently...any ideas on this....
Reply With Quote
  #49  
Old 22.06.2008, 07:30
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
After my last job/redundancy earlier this year I received my pension lumpsum which had to be transferred to the above F...........konto as well. Is it really possible if I wished to withdraw/transfer this money if I so wish....Why is it compulsory blocked until I retire? I could chose to invest it differently...any ideas on this....
Fz is blocked because it is tax sheltered. You got and get tax benefits (deductibility on contributions, no tax on interest, no wealth tax). Therefore the taxman imposes certain restrictions. The money can be withdrawn:
  • to buy property
  • to start a business
  • on leaving Switzerland, etc.
A tax is imposed on withdrawal, which partly nullifies the previous tax benefits.

Fz money can be invested according to certain guidelines. Various mutual funds are approved. Maximum equity component is capped to limit risk. Equity is not a good idea, actually, because the Fz is only a transient. You are parking assets till you are reemployed or decide to move on.

Talk to your bankers. If you have a large amount, they can even bespoke structure your Fz investments.
__________________
Caveat lector!
Reply With Quote
  #50  
Old 22.06.2008, 13:00
Newbie 1st class
 
Join Date: Apr 2007
Location: Zurich
Posts: 20
Groaned at 0 Times in 0 Posts
Thanked 2 Times in 1 Post
ngina has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

Thanks for the info. As buying property is one of the criterias for Fz withdrawal...does that mean buying property anywhere outside switzerland or has to be only within.....
Reply With Quote
  #51  
Old 22.06.2008, 13:21
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
Thanks for the info. As buying property is one of the criterias for Fz withdrawal...does that mean buying property anywhere outside switzerland or has to be only within.....
Withdrawal only permitted to buy a flat or house where you yourself will stay. It is known as "WohnEigentumsForderung" which roughly translated means "encourage owning a home". Ergo, if you are a Swiss resident, then the property must be in Switzerland.

If you are not resident in Switzerland, then you can cash out anyway.
Reply With Quote
  #52  
Old 25.06.2008, 09:42
Member
 
Join Date: Nov 2007
Location: Geneva
Posts: 190
Groaned at 0 Times in 0 Posts
Thanked 13 Times in 13 Posts
wildboar has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
Withdrawal only permitted to buy a flat or house where you yourself will stay. It is known as "WohnEigentumsForderung" which roughly translated means "encourage owning a home". Ergo, if you are a Swiss resident, then the property must be in Switzerland.
well, my question is on possibilities and not what's standard.. "Encouraging owning a home" If the amount can be taken out for this purpose, why not for buying 'home' abroad? Home is not built is one day - takes years, so I start building home abroad now while still living here but with an intention to move once it's finished? It may take 2 years.. Is it possible?
Reply With Quote
  #53  
Old 25.06.2008, 20:02
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
well, my question is on possibilities and not what's standard.. "Encouraging owning a home" If the amount can be taken out for this purpose, why not for buying 'home' abroad? Home is not built is one day - takes years, so I start building home abroad now while still living here but with an intention to move once it's finished? It may take 2 years.. Is it possible?
You can engage with the pertinent authorities to explore your non-standard requirements:
  1. Ask your Fz-Trust or pension-fund, or insurer for permission to withdraw assets.
  2. Ask your friendly Cantonal tax-office about the tax impact. The Swiss tax authorities will give you a committed answer.
Good luck. And keep us all posted.
Reply With Quote
  #54  
Old 20.01.2009, 23:16
Newbie
 
Join Date: Jan 2009
Location: Coppet (Vaud)
Posts: 1
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
Bludano has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
Just a few corrections.

Under the current BVG legislation the transfer of 2nd Pillar savings outside of Switzerland is not allowed except to Leichtenstein. On leaving the choice is either to pay all of the pension fund savings out or to pay the super-obligatory part only. This is always available.

Double Taxation (Avoidance) Agreements apply almost exclusively to earnings and not to savings. Various countries notably Germany tax cashed in pension contributions whether taken with retirement or early as income and irrespective of the taxation situation in the country from which they are paid out... This is different to pension payments where tax treaties then cover the income.
I am leaving Switz next year, after 10 years here, likely to Canada or the US. I understand that you can take your 2nd pillar out and pay the cantonal based tax. Great, so far so good. However, Canada and the US seem to classify early withdrawls of pension as taxable income (you must be outside of CH to redeem the pension and I will already be living the N America when I receive the money) leaving a huge tax problem. Does anyone know more about this and what the best solution would be?
Reply With Quote
  #55  
Old 24.02.2009, 19:43
muze7's Avatar
Forum Veteran
 
Join Date: May 2006
Location: Uk now
Posts: 1,206
Groaned at 3 Times in 3 Posts
Thanked 145 Times in 91 Posts
muze7 is considered knowledgeablemuze7 is considered knowledgeablemuze7 is considered knowledgeable
Re: Freizuegigkeitskonto [vested benefit account]

I can only think of two options:

1) leave it in, and hope the CHF will stay strong until you retire
2) move to a country without the taxation problem first, for a few months; choose one outside the EU (like Australia) because then you can take the obligatory part as well; note that to get the money, you have to give the pension fund some proof that you live in country X...
Reply With Quote
  #56  
Old 25.02.2009, 10:12
ommthree's Avatar
Senior Member
 
Join Date: Apr 2007
Location: Zürich
Posts: 275
Groaned at 0 Times in 0 Posts
Thanked 108 Times in 67 Posts
ommthree has made some interesting contributions
Re: Freizuegigkeitskonto [vested benefit account]

Ok, so here's a question. I moved to the EU (Germany), and had to put pension into a Freizuegigkeitskonto. Now I'm leaving the EU (India) for a year, before coming back to Europe (probably). Do you think I can wangle the money out of the Freizuegigkeitskonto?
Reply With Quote
  #57  
Old 28.04.2009, 20:50
ommthree's Avatar
Senior Member
 
Join Date: Apr 2007
Location: Zürich
Posts: 275
Groaned at 0 Times in 0 Posts
Thanked 108 Times in 67 Posts
ommthree has made some interesting contributions
Re: Freizuegigkeitskonto [vested benefit account]

Daft question probably, but I just want to get this clear. Am I going to be taxed on money that I transfer from a Freizugigkeitskonto into an ordinary account (being out of the EU and able to do this) or was the tax paid at the point of transferring the money from the second pillar pension into the Fz account? If the former, who collects the tax?
Reply With Quote
  #58  
Old 29.04.2009, 11:23
Forum Veteran
 
Join Date: Feb 2008
Location: Zurich
Posts: 1,013
Groaned at 6 Times in 6 Posts
Thanked 341 Times in 259 Posts
bill_door has an excellent reputationbill_door has an excellent reputationbill_door has an excellent reputationbill_door has an excellent reputation
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
Daft question probably, but I just want to get this clear. Am I going to be taxed on money that I transfer from a Freizugigkeitskonto into an ordinary account (being out of the EU and able to do this) or was the tax paid at the point of transferring the money from the second pillar pension into the Fz account? If the former, who collects the tax?
you are definitely stung for tax, 35% i think, when you move it out of the vested benefits account. the only way to avoid/minimise this to move it to a holding account in one of the smaller cantons (ZG,SZ) and then OUT of the EU/CH ONLY. if you move it within the EU it should to be a like for like move (or, you get stung anyways for tax), and the agreements are set up now so that you will get taxed when you take it out of that EU account.

check out the sticky; consolidated pensions info in the pension thread.
Reply With Quote
  #59  
Old 31.05.2009, 22:21
Newbie 1st class
 
Join Date: May 2009
Location: Zürich
Posts: 19
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
Bayesco has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
Ok, so here's a question. I moved to the EU (Germany), and had to put pension into a Freizuegigkeitskonto. Now I'm leaving the EU (India) for a year, before coming back to Europe (probably). Do you think I can wangle the money out of the Freizuegigkeitskonto?

Hi Ommthree

Yes, I think you could cash in your vested benefit.
As you have left already Switzerland for living in Germany, you could have all except
- the compulsary part and
- if you have done volountary buy backs which has not been for at least three years in the circuit of the 2nd pillar.

I would not recommend to withdraw your vested benefit when you are in Germany, the German tax authority is crazy....they tax your vested benefit cashed in partially as an income.....which means huge taxes....although you already have paid tax at source in Switzerland on the same.... What ever....If you want to cash in your vested benefit, I recommend usually the following proceder:
- to open one or two vested benefit accounts (usually at www.pensfree.ch, as they are specialist in those things.
- keep it there as long as you do not need it to earn your living....(it is always a good reserve for bad moment...., it is money meant for your retirement and the vested benefit is protected even in case of your personal bankruptcy.
- Before coming back to Europe, especially in case you want come back to settle down again in Switzerland....it might be very interesting having no second pillar for tax reason, if you want to restart building up your second pillar by doing voluntary buy backs.....

Of course, everthing depends on the amount of you vested benefit which should be higher than 100k. Of course, the bigger the amount of your invested benefit the more intersting becomes the tax economy...

Pasquale Zarra (pasquale.zarra@pens-expert.ch) from PensFree used to inform me about those things in all details.
Reply With Quote
  #60  
Old 31.05.2009, 22:57
Newbie 1st class
 
Join Date: May 2009
Location: Zürich
Posts: 19
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
Bayesco has no particular reputation at present
Re: Freizuegigkeitskonto [vested benefit account]

Quote:
View Post
Ok, I found some more info on this. Perhaps you have a different type of pension fund than I do. According to Saldo Ratgeber (Gut Vorsorgen by H. Stauffer) two main types are Leistungsprimat and Beitragsprimatkasses. What this means is that if yours is a Beitragsprimatkasse, you can usually take everything into a Freiz. konto.

However, Leistungsprimatkasses give you a percentage of your income upon retiring, and require constant adjustment of premiums. Therefore, they have a different calculation when you leave them. In this case, there are the three standard methods (Barwert vs Mindestensbeitrag etc.) and they pay whichever method results in the highest amount. Now as different funds have different Barwert factors, this amount differs per person. For people under 45 however, it is usually a lesser amount than the amount that results from the age rule (4% times your age minus 20).

So my understanding is that for Beitragsprimatkassen, they will likely pay out the super-obligatory part according to the 4% age rule, and if you are less than 45 years old, this equates to less than 100%. As this amount is paid from your arbeitgeberbeitrage (employer contrib.), this means you will lose the difference. Example, I am 33, so if I leave this year then 4% times 33-20 is 52%. I will get what I paid myself plus 52% of my contributions. However, since I paid 8.4% of my income and as a contracter, I also paid 10.4% of my income on behalf of my employer, this means that I not only lose 48% of my contributions, I lose more because the employer costs that I contributed were higher.

When I raised this, my pension fund said specifically, well the amount you leave behind will help our fund pay other people.

In terms of references, my pension fund refers to Artikel 7 FZG, does that help?

Correction / More information:

It is not art. 7 FZG, but Art. 17 FZG (Freizügigkeitsgesetz (German) or Fren LFLP (Loi fédérale sur le libre passage dans la prévoyance professionnelle vieillesse, survivant et invalidité).

I think it is to complicated to explain all calculation and needless.
Expressed simply, you can say the following:
If y an employee is leaving the company, he has the entitlement to get his vested benefit.
To know the amount of the vested benefit, the pension scheme is doing different calculation:
a) one of them is as describe in art. 17 FZG.
b) Depending whether your pension scheme is run with the "system"
- define benefit (Leistungsprimat / primauté de prestation)
OR
- define contribution (Beitragsprimat / primauté de cotisation) there will be sorted out another amount of your vested benefit.
c) Furthermore, the pension scheme checks the effective amount on the personal account of the leaving employee.

And now, as the name said itself "full vested benefit is guaranted (volle Freizügigkeit / prestation de libre passage garantie), the leaving employee gets always the highest amount of the calculation as its vested benefit.

There are only seldom situation where an employee can "lose" something....So from this part, the law revision was very good....in order that people had not to stay with an employer only not to lose a big part of his pension capital....
Reply With Quote
Reply

Tags
freizuegigkeitskonto, leaving switzerland, pillar 2, pillar 3, second pillar, third pillar, vested benefits account




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
RAV registration and benefit payable. catwoman9437 Employment 230 25.09.2018 14:47
Child benefit - Switzerland Adzia Family matters/health 69 02.10.2014 12:35
Unemployment benefit entitlement question and a tip Richard Insurance 29 12.08.2008 12:19
Unemployment Benefit / Study licia2007 Employment 12 20.07.2007 15:55


All times are GMT +2. The time now is 14:07.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0