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  #121  
Old 28.03.2015, 16:35
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Re: Vested benefits account

Hi all, I have a small sum in a Vested Benefits account from when I was PhDing in Bern. Should I leave it were it is, or transfer it to my current employer pension scheme?
I'm not really sure why it's still there, my pension has been transferred successfully each time I have switched jobs, or so I thought.
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  #122  
Old 31.07.2015, 01:57
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Re: Freizuegigkeitskonto [vested benefit account]

As a US person, I am getting one decline after another from BCGE, BCV, PostFinance, BSI, etc. to open a Vested Benefits Account.

Do they have the right to decline US persons on the basis of FATCA?

What is left for US persons in this case? Is there a default mandated organization that would take the money?

I have my Pillar at SwissLife now. Does SwissLife allow the opening of a Vested Benefits account for US persons?

I am at a loss as to what to do. The honest tax payers are being strangled while the tax evaders have already moved their dollars to Dubai banks.
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  #123  
Old 31.07.2015, 08:33
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Re: Freizuegigkeitskonto [vested benefit account]

If you need a home (Freizügigkeitskonto) for your Pillar II pension funds, the quasi-governmental Auffangeinrichtung BVG should be willing and is indeed required to take these funds. It is specifically exempt from Fatca reporting in the IGA:

http://chaeis.net/

As I am not mistaken, your pension fund must make direct contact with the Auffangeinrichtung to open an account and transfer the funds.
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  #124  
Old 31.07.2015, 11:56
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Re: Freizuegigkeitskonto [vested benefit account]

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Should I leave it were it is, or transfer it to my current employer pension scheme?
I'm not really sure why it's still there, my pension has been transferred successfully each time I have switched jobs, or so I thought.
Transfer it to your current employer pension scheme — that'd be the normal procedure.

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As a US person, I am getting one decline after another from BCGE, BCV, PostFinance, BSI, etc. to open a Vested Benefits Account.

Do they have the right to decline US persons on the basis of FATCA?

What is left for US persons in this case? Is there a default mandated organization that would take the money?
[…]
Do you have a letter from any of these banks stating the reason for rejecting your bank account application?

If you're employed ask your previous pension fund to transfer the sum to your current one.

If you have more questions, I suggest you to give the Vested Benefits Accounts Institute a call, they provide assistance in English, http://www.chaeis.net/en/fzk-vested-...s/contact.html.
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  #125  
Old 31.07.2015, 14:54
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Re: Freizuegigkeitskonto [vested benefit account]

Thank you for the quick feedback guys.

I am heading back to the US. I am therefore leaving Switzerland for good, or as they say until next time.

I am learning Swisslife can not just transfer the money out to a bank account. It must transit through the Vested Benefits/Libre Passage account.

What these banks are hiding behind: Well sir, we can't open a Libre Passage account as you need a formal banking relationship with us; and given you are a US person, ( they are now much more open about it, and by the way, I am native speaker in French so the discussion is with bank branch managers in French, Canton Vaud/Geneva ) chances are very high you will be declined/not welcome to bank with us, especially that you will not be a Swiss resident.

It is a catch-22: VB account means banking relationship, banking relationship excludes US persons, worse if you are leaving one more reason not to have any banking relationship, therefore no VB account at our bank.

I think our US issues are not stopping at opening a BV account. I will pursue the Federal route if there is absolutely no other recourse. The next issue will be withdrawing the funds. I am told the funds can be wired to a Swiss bank account in my name only. That's the next catch-22: then how can I withdraw the funds?

It is not as easy as: keep your bank account open for 3 months and that will take care of that: I had purchased contributions in the past few years: you can do so tax free when you move to Switzerland and contribute for at least 5 years. Well, those contributions are blocked for 3 years from date of contribution. And therefore, the withdrawal is at least a 2018/2019 milestone.

What a nightmare.
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  #126  
Old 31.07.2015, 15:55
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Re: Freizuegigkeitskonto [vested benefit account]

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Thank you for the quick feedback guys.

I am heading back to the US. I am therefore leaving Switzerland for good, or as they say until next time.

I am learning Swisslife can not just transfer the money out to a bank account. It must transit through the Vested Benefits/Libre Passage account.

What these banks are hiding behind: Well sir, we can't open a Libre Passage account as you need a formal banking relationship with us; and given you are a US person, ( they are now much more open about it, and by the way, I am native speaker in French so the discussion is with bank branch managers in French, Canton Vaud/Geneva ) chances are very high you will be declined/not welcome to bank with us, especially that you will not be a Swiss resident.

It is a catch-22: VB account means banking relationship, banking relationship excludes US persons, worse if you are leaving one more reason not to have any banking relationship, therefore no VB account at our bank.

I think our US issues are not stopping at opening a BV account. I will pursue the Federal route if there is absolutely no other recourse. The next issue will be withdrawing the funds. I am told the funds can be wired to a Swiss bank account in my name only. That's the next catch-22: then how can I withdraw the funds?

It is not as easy as: keep your bank account open for 3 months and that will take care of that: I had purchased contributions in the past few years: you can do so tax free when you move to Switzerland and contribute for at least 5 years. Well, those contributions are blocked for 3 years from date of contribution. And therefore, the withdrawal is at least a 2018/2019 milestone.

What a nightmare.
You can take the pension as cash, so no need to keep it in CH
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  #127  
Old 31.07.2015, 16:01
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Re: Freizuegigkeitskonto [vested benefit account]

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I am heading back to the US. I am therefore leaving Switzerland for good, or as they say until next time.

I am learning Swisslife can not just transfer the money out to a bank account. It must transit through the Vested Benefits/Libre Passage account.
AFAIR, if you're heading back to the US, then you can cash out, FZG Art 5.

http://www.chaeis.net/en/fzk-vested-...migration.html

Again try calling the Stiftung Auffangeinrichtung BVG to get the right information.
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  #128  
Old 19.11.2015, 14:11
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Re: Freizuegigkeitskonto [vested benefit account]

Hi all,

I just received a letter from my Pillar II fund and just wanted everyone's opinion on things.

I am leaving my job, but not leaving switzerland BUT also not being employed by another company (I still have a job elsewhere).

From what I've read, I can transfer to a vested benefits account.

So my questions are:

1) Are both obligatory and supra-obligatory contributions transferred to the vested benefits?

and

2) When I do move out of Europe, I can cash this vested benefits account out.

Thanks
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  #129  
Old 19.11.2015, 14:52
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Re: Freizuegigkeitskonto [vested benefit account]

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Hi all,

I just received a letter from my Pillar II fund and just wanted everyone's opinion on things.

I am leaving my job, but not leaving switzerland BUT also not being employed by another company (I still have a job elsewhere).

From what I've read, I can transfer to a vested benefits account.

So my questions are:

1) Are both obligatory and supra-obligatory contributions transferred to the vested benefits?

and

2) When I do move out of Europe, I can cash this vested benefits account out.

Thanks
Yes

Possibly, even leaving for the EU you can probably take cash, depends on exactly where you go.
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  #130  
Old 19.11.2015, 18:42
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Re: Freizuegigkeitskonto [vested benefit account]

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Yes

Possibly, even leaving for the EU you can probably take cash, depends on exactly where you go.

Thanks!
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  #131  
Old 12.04.2016, 22:16
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Re: Freizuegigkeitskonto [vested benefit account]

Hi, I am leaving Switzerland permanently end of this month, and I am going to US for postdoctoral research paid by a stipend/grant from swiss national science foundation. My nationality is Malaysia.

Do you think I can cash out my 2nd pillar although I am going to US with a J1 visa (exchange/visitor visa), which categorizes me as a non-resident Alien ? Moreover, as I have said, I will not be employed and therefore no income in US, and hence I don't even a social security number.

The second question is, i read that cashing out while you are still in switzerland will be taxed as income tax, while cashing out while you are in foreign country will be taxed as witholding tax depending on which kanton the tax is held in, right ? In general, income and witholding tax, which one is lower?

I also read about the 4% rule, i.e. I am 29 this year, if i cash out my 2nd pillar, i only get (29-20) *4 = 36% for the part my employer contributed, right ? Is this 4% rule universal for all pension funds in switzerland, or is it just a specific pension company? Mine is with publica (for eth employee), do they have the same rule ?


Thanks !
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  #132  
Old 12.04.2016, 22:23
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Re: Freizuegigkeitskonto [vested benefit account]

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I also read about the 4% rule, i.e. I am 29 this year, if i cash out my 2nd pillar, i only get (29-20) *4 = 36% for the part my employer contributed, right ? Is this 4% rule universal for all pension funds in switzerland, or is it just a specific pension company? Mine is with publica (for eth employee), do they have the same rule ?


Thanks !
You get all the contributions paid on your behalf by your employer.

If you become US tax resident, you may be taxed on the payout in the US, a credit will be given for any withholding tax. You can't get the money until after you have actually left CH, so no longer resident in CH.
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  #133  
Old 12.04.2016, 22:37
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Re: Freizuegigkeitskonto [vested benefit account]

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You get all the contributions paid on your behalf by your employer.

If you become US tax resident, you may be taxed on the payout in the US, a credit will be given for any withholding tax. You can't get the money until after you have actually left CH, so no longer resident in CH.
Thanks for your swift reply ! Does that mean I lose 68 % of the contributions paid by me (not my employer)? Can I cash out the full amount if I wait until I have reached 45 ?
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  #134  
Old 12.04.2016, 22:42
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Re: Freizuegigkeitskonto [vested benefit account]

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Thanks for your swift reply ! Does that mean I lose 68 % of the contributions paid by me (not my employer)? Can I cash out the full amount if I wait until I have reached 45 ?
You get all the contributions to date, plus an interest & growth to date.

There won't be any additional contributions made after you leave, so no point in waiting.
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  #135  
Old 19.04.2016, 20:36
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Re: Freizuegigkeitskonto [vested benefit account]

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You get all the contributions to date, plus an interest & growth to date.

There won't be any additional contributions made after you leave, so no point in waiting.
I just got a reply from the company that manages my BVG today. Yeah, I can cash out both me and my employer's part, but subjected to witholding tax of 7% in kanton Zurich
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  #136  
Old 19.04.2016, 20:46
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Re: Freizuegigkeitskonto [vested benefit account]

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I just got a reply from the company that manages my BVG today. Yeah, I can cash out both me and my employer's part, but subjected to witholding tax of 7% in kanton Zurich
You should find out what the tax liability is in the US as it will be income received whilst US tax resident. Probably bad news as Swiss pensions are non qualifying for US tax purposes
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  #137  
Old 19.04.2016, 20:54
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Re: Freizuegigkeitskonto [vested benefit account]

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...I am going to US with a J1 visa (exchange/visitor visa), which categorizes me as a non-resident Alien ? Moreover, as I have said, I will not be employed and therefore no income in US, and hence I don't even a social security number...
I can't answer your questions related to Switzerland, but it seems fmf is right that you will likely still owe U.S. tax. More info here.

Also if you plan to open a bank account while there you'll need either a SSN or TIN (taxpayer identification number) to do it.
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  #138  
Old 19.04.2016, 22:38
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Re: Freizuegigkeitskonto [vested benefit account]

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You should find out what the tax liability is in the US as it will be income received whilst US tax resident. Probably bad news as Swiss pensions are non qualifying for US tax purposes
Hi, I will be holding a J1 visa while residing in U.S. Hence, I am a non-resident alien and will only be taxed on U. S. sourced income.

So the 'income' from swiss pension does not count. Moreoever, the money will be banked into my swiss bank accounts.
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  #139  
Old 20.04.2016, 21:19
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Re: Freizuegigkeitskonto [vested benefit account]

Now I have a more advanced tax question

(I am a scientist/ investor, so I like to optimize tax, and squeeze every last drop of it)


I am aware that when I withdraw my pillar 2, it is classified as taxable income and it will be taxed with witholding tax. That is fine ! and so I proceed with cashing it out this year 2016 with an assest of 30k before witholding tax.

Assuming that I have not worked a single day in year 2016. Does it make sense for me to contribute pillar 3a to claim the witholding tax due to the reimbursement of my pillar 2?

For example, I contribute pillar 3a of 6k CHF (utilising max 20% of my pillar 2 assest )in year 2016 , and I am going to file my tax reclaimation before 31st March 2017. Can get part of the witholding tax back ?
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  #140  
Old 21.04.2016, 09:57
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Re: Freizuegigkeitskonto [vested benefit account]

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Now I have a more advanced tax question

(I am a scientist/ investor, so I like to optimize tax, and squeeze every last drop of it)


I am aware that when I withdraw my pillar 2, it is classified as taxable income and it will be taxed with witholding tax. That is fine ! and so I proceed with cashing it out this year 2016 with an assest of 30k before witholding tax.

Assuming that I have not worked a single day in year 2016. Does it make sense for me to contribute pillar 3a to claim the witholding tax due to the reimbursement of my pillar 2?

For example, I contribute pillar 3a of 6k CHF (utilising max 20% of my pillar 2 assest )in year 2016 , and I am going to file my tax reclaimation before 31st March 2017. Can get part of the witholding tax back ?
You won't get any tax relief on your contribution, you have not worked in 2016 so no withholding tax to reclaim, but will pay tax on the payout. This is about as stupid an idea as anybody could think of.


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