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  #141  
Old 11.09.2016, 12:33
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Re: Freizuegigkeitskonto [vested benefit account]

On the topic of the libre passage/vested benefits account I am not able to find the exact law. There is some conflicting information on if it is allowed to keep the vested benefit account after you start a new job. Even if you are an employee of your own SA you will be subject to a mandatory pension fund and its insurances. This fund will require you to transfer all funds to them.

I believe it is not allowed to keep the libre passage account when you enter a new job with the mandatory pension fund attached to it. On the other hand it seems never to be checked (I don't know who wants to check this as there is no tax difference)

My question is which rule/law is governing this. Any pointers where to look?
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  #142  
Old 11.09.2016, 12:56
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Re: Freizuegigkeitskonto [vested benefit account]

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On the topic of the libre passage/vested benefits account I am not able to find the exact law. There is some conflicting information on if it is allowed to keep the vested benefit account after you start a new job. Even if you are an employee of your own SA you will be subject to a mandatory pension fund and its insurances. This fund will require you to transfer all funds to them.

I believe it is not allowed to keep the libre passage account when you enter a new job with the mandatory pension fund attached to it. On the other hand it seems never to be checked (I don't know who wants to check this as there is no tax difference)

My question is which rule/law is governing this. Any pointers where to look?
I did, but then the other pension was a 'freelancers' pension that multiple employers paid into each year.
When I left CH I transferred the second one to the same libre passage account. A few months later they paid out in full. I went to live in an EU country & was not subject to compulsory insurance.
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  #143  
Old 11.09.2016, 14:52
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Re: Freizuegigkeitskonto [vested benefit account]

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I did, but then the other pension was a 'freelancers' pension that multiple employers paid into each year.
When I left CH I transferred the second one to the same libre passage account. A few months later they paid out in full. I went to live in an EU country & was not subject to compulsory insurance.
You mean freelance as in selfemployed? As These are on a completely different set of rules. Will Check it out anyway. Thanks
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  #144  
Old 11.09.2016, 15:16
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Re: Freizuegigkeitskonto [vested benefit account]

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You mean freelance as in selfemployed? As These are on a completely different set of rules. Will Check it out anyway. Thanks
No freelance in the Swiss sense, so working as an employee for multiple employers, employment from as short as 1/2 day.

By law pensions need only to be paid for engagements over 3 months, however in practice all employers with the exception of a Swiss Government agency paid the pension contribution in full.
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  #145  
Old 12.09.2016, 09:29
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Re: Freizuegigkeitskonto [vested benefit account]

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I believe it is not allowed to keep the libre passage account when you enter a new job with the mandatory pension fund attached to it. On the other hand it seems never to be checked (I don't know who wants to check this as there is no tax difference)
Yes and yes.
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  #146  
Old 12.09.2016, 12:14
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Re: Freizuegigkeitskonto [vested benefit account]

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Yes and yes.
Thank you for the confirmation. Do you know which law governs that? Or is it just the pension fund rules (which may also be governed by a law)

I try to assess the risk involved as this libre account would be out there for a while as I am long from being 65

Many thanks in advance
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  #147  
Old 12.09.2016, 15:58
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Re: Freizuegigkeitskonto [vested benefit account]

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Thank you for the confirmation. Do you know which law governs that? Or is it just the pension fund rules (which may also be governed by a law)

I try to assess the risk involved as this libre account would be out there for a while as I am long from being 65

Many thanks in advance
What are you trying to achieve and why???

The pension is not just about the pension, it covers incapacity and death benefits as well so if you have a family this would be a major concern.
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  #148  
Old 12.09.2016, 16:10
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Re: Freizuegigkeitskonto [vested benefit account]

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What are you trying to achieve and why???
A better return than the paltry <1% p.a. offered by many, if not most, pension funds in Switzerland. Investors can choose how their Freizügigkeitskonti are invested -- for example, with a large component in equities -- and potentially gain far higher returns on their retirement capital.

Insurance benefits (and premiums for this insurance) are based on the salary of the insured person, not on the amount invested in their pension fund. The premiums are deducted from the fund balance (therefore, usually paid jointly by the employer and employee). The risk is perceived to be reduced when the employee has a large pension fund balance, so the insurance premiums will reduce slightly if an employee transfers his/her pension fund balance from his/her previous employer to the new pension fund -- but in my view, this small saving does not outweigh the extra gains to be made by investing the pension capital more aggressively (or even just more wisely) through a Freizügigkeitskonto.
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  #149  
Old 12.09.2016, 17:18
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Re: Freizuegigkeitskonto [vested benefit account]

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What are you trying to achieve and why???

The pension is not just about the pension, it covers incapacity and death benefits as well so if you have a family this would be a major concern.
Thanks for your concern. I am joining a new pension fund and will have insurance etc. It is just the pension fund that I am leaving which I would like to have the saved amounts transferred to the libre account. So I start at the new pension fund at zero (but with the insurances of course).

If I find a pension fund with a lot of young people contributing to it I may transfer all to that fund. That not being likely I prefer to use my passage libre to make a better return.
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  #150  
Old 18.10.2016, 16:05
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Re: Freizuegigkeitskonto [vested benefit account]

There is only one check performed and that is at the moment you decide to retire or reach the retirement age. If at that point you have the libre passage and also a LPP fund you will get in trouble with the tax authority. Of course you can always transfer your libre passage account to the fund in a later stage.

This applies if you have transferred your LPP pilar 2 to the libre passage account and then start another job which will make you join another Pilar 2 fund (mandatory by law).
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  #151  
Old 01.04.2017, 15:35
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Re: Freizuegigkeitskonto [vested benefit account]

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What is left for US persons in this case? Is there a default mandated organization that would take the money?
I am facing this challenge as a US citizen about to leave Switzerland, but since I am staying in the EU (Germany) I am by law required to keep the mandatory portion in a vested account in Switzerland. However, as a US person, they will not permit me to have those assets invested in funds or securities. So I would be stuck with the standard interest rate (0.05-0.2% depending on the bank).
http://www.moneyland.ch/en/vestedBenefitsAccount/list
Letting this sit there for ~30 years would be a big wasted investment potential, so I really want to avoid this.

Alternatively, to get the whole thing out in cash, all I have to do is tell my current benefits account that I am leaving the EU and moving back to the US. They have no way of knowing that I am actually moving to Germany, right?

I'm looking for advice from users with similar experiences (US persons moving from CH to EU), but finding no useful information.
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  #152  
Old 01.04.2017, 21:18
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Re: Freizuegigkeitskonto [vested benefit account]

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I am facing this challenge as a US citizen about to leave Switzerland, but since I am staying in the EU (Germany) I am by law required to keep the mandatory portion in a vested account in Switzerland. However, as a US person, they will not permit me to have those assets invested in funds or securities. So I would be stuck with the standard interest rate (0.05-0.2% depending on the bank).
http://www.moneyland.ch/en/vestedBenefitsAccount/list
Letting this sit there for ~30 years would be a big wasted investment potential, so I really want to avoid this.

Alternatively, to get the whole thing out in cash, all I have to do is tell my current benefits account that I am leaving the EU and moving back to the US. They have no way of knowing that I am actually moving to Germany, right?

I'm looking for advice from users with similar experiences (US persons moving from CH to EU), but finding no useful information.
Your leaving cert will say where you claim to leave to. They may require proof of residence in the US before releasing funds.
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  #153  
Old 03.09.2017, 20:24
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Re: Freizuegigkeitskonto [vested benefit account]

Hi Forum!

I'd like to join and refresh the topic a bit. I think a lot of what I learned here applies to me, but there is a bit of a twist that makes thing complicated for so I thought I might ask for advice.

After seven years in Switzerland it’s time for more adventures and move t another country. With that came a question what to do with my retirement funds? o_O

As a background: I’m from Poland. Leaving for Australia. Might come back to Switzerland after two years - but cannot state the chances yet of that happening…

As much as I manged to gather there are few solutions:

1) ‘Classic’ approach would be to open vested benefit account and leave my funds there waiting for retirement / home purchase. With the mere 0.2% interest rate this doesn’t sound that exciting..

2) Since I’m leaving EU so there is an option to withdraw my contributions (most likely via bank in Schwyz to take advantage of lower taxes as recomended in the thread.. or using PensFree) and invest them on my own in Poland, Switzerland or elsewhere. Disadvantage: if I come back to Switzerland I will be (?) required to pay the money back to the pension fund.

3) Open a vested account that allows some sort of freedom to invest funds (like CS https://www.credit-suisse.com/ch/en/...-vorsorge.html) with an advantage of potentially higher gains; but disadvantage tha, again, if I come back - I might be forced to sell the funds on not so optimal moment when rejoining pension fund?

What would be your recomendations for such scenario?
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  #154  
Old 03.09.2017, 20:39
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Re: Freizuegigkeitskonto [vested benefit account]

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Hi Forum!

I'd like to join and refresh the topic a bit. I think a lot of what I learned here applies to me, but there is a bit of a twist that makes thing complicated for so I thought I might ask for advice.

After seven years in Switzerland it’s time for more adventures and move t another country. With that came a question what to do with my retirement funds? o_O

As a background: I’m from Poland. Leaving for Australia. Might come back to Switzerland after two years - but cannot state the chances yet of that happening…

As much as I manged to gather there are few solutions:

1) ‘Classic’ approach would be to open vested benefit account and leave my funds there waiting for retirement / home purchase. With the mere 0.2% interest rate this doesn’t sound that exciting..

2) Since I’m leaving EU so there is an option to withdraw my contributions (most likely via bank in Schwyz to take advantage of lower taxes as recomended in the thread.. or using PensFree) and invest them on my own in Poland, Switzerland or elsewhere. Disadvantage: if I come back to Switzerland I will be (?) required to pay the money back to the pension fund.

3) Open a vested account that allows some sort of freedom to invest funds (like CS https://www.credit-suisse.com/ch/en/...-vorsorge.html) with an advantage of potentially higher gains; but disadvantage tha, again, if I come back - I might be forced to sell the funds on not so optimal moment when rejoining pension fund?

What would be your recomendations for such scenario?
Option 2. However make sure you understand the taxation of the lump sum in your new place of residence. Swiss withholding is potentially not final taxation payable & could be reclaimable in full making moving to a low tax canton pointless.

If you return nothing happens.
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  #155  
Old 04.09.2017, 02:53
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Re: Freizuegigkeitskonto [vested benefit account]

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Hi Forum!

I'd like to join and refresh the topic a bit. I think a lot of what I learned here applies to me, but there is a bit of a twist that makes thing complicated for so I thought I might ask for advice.

After seven years in Switzerland it’s time for more adventures and move t another country. With that came a question what to do with my retirement funds? o_O

As a background: I’m from Poland. Leaving for Australia. Might come back to Switzerland after two years - but cannot state the chances yet of that happening…

As much as I manged to gather there are few solutions:

1) ‘Classic’ approach would be to open vested benefit account and leave my funds there waiting for retirement / home purchase. With the mere 0.2% interest rate this doesn’t sound that exciting..

2) Since I’m leaving EU so there is an option to withdraw my contributions (most likely via bank in Schwyz to take advantage of lower taxes as recomended in the thread.. or using PensFree) and invest them on my own in Poland, Switzerland or elsewhere. Disadvantage: if I come back to Switzerland I will be (?) required to pay the money back to the pension fund.

3) Open a vested account that allows some sort of freedom to invest funds (like CS https://www.credit-suisse.com/ch/en/...-vorsorge.html) with an advantage of potentially higher gains; but disadvantage tha, again, if I come back - I might be forced to sell the funds on not so optimal moment when rejoining pension fund?

What would be your recomendations for such scenario?
You may have another option. If you're moving to Australia, you may be able to transfer your Swiss pension tax-free to an Australian superannuation (pension) account. These bear virtually no resemblance to their distant Swiss relatives; you get to choose how your retirement funds are invested—you can even self-manage your superannuation. My Australian "super" fund is managed for me and returned 17% net last year. If/when you leave Australia (but why would you?!), you may be able to take your super tax-free and roll it into your next pension fund. You'd need to check with a local advisor; the laws have changed significantly in the last few years.

If you can't or don't want to do that, your option 3 is not bad (although you'll likely achieve better returns elsewhere); you won't face any tax consequences. If you come back to a job in Switzerland you are supposed to transfer your Freizügigkeitskonto into your new corporate pension scheme but in reality, you can just ignore the request to do so and keep the Freizügigkeitskonto (with its likely far superior return) in place, parallel with the corporate plan.
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  #156  
Old 07.09.2017, 13:51
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Re: Freizuegigkeitskonto [vested benefit account]

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Option 2. However make sure you understand the taxation of the lump sum in your new place of residence. Swiss withholding is potentially not final taxation payable & could be reclaimable in full making moving to a low tax canton pointless.

If you return nothing happens.
Thank you @fatmanfilms! Could you please comment more on how the recalim of the tax could be implemented? I haven't come across this solution and cannot find anything definitive online.. Would I then have to pay my taxes in Poland and/or Switzerland?
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Old 07.09.2017, 13:55
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Re: Freizuegigkeitskonto [vested benefit account]

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You may have another option. If you're moving to Australia, you may be able to transfer your Swiss pension tax-free to an Australian superannuation (pension) account. These bear virtually no resemblance to their distant Swiss relatives; you get to choose how your retirement funds are invested—you can even self-manage your superannuation. My Australian "super" fund is managed for me and returned 17% net last year. If/when you leave Australia (but why would you?!), you may be able to take your super tax-free and roll it into your next pension fund. You'd need to check with a local advisor; the laws have changed significantly in the last few years..
Thanks a bunch @22yards! Contacted UniSuper to ask for their opinion & advice on that. Would that solution require withdrawal of the money > paying tax > payment into super > claiming CH tax back?
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Old 07.09.2017, 16:42
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Re: Freizuegigkeitskonto [vested benefit account]

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Thank you @fatmanfilms! Could you please comment more on how the recalim of the tax could be implemented? I haven't come across this solution and cannot find anything definitive online.. Would I then have to pay my taxes in Poland and/or Switzerland?
If the money is taxable in another jurisdiction with a double taxation treaty, then the Swiss tax is refundable. The question is "does my new country of residence want to tax the pension fund payment" & how high will that tax be, if so then going to the lowest tax Swiss canton is a waste of time.

Last edited by fatmanfilms; 07.09.2017 at 18:58. Reason: spell correct :D
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Old 07.09.2017, 17:52
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Re: Freizuegigkeitskonto [vested benefit account]

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Thanks a bunch @22yards! Contacted UniSuper to ask for their opinion & advice on that. Would that solution require withdrawal of the money > paying tax > payment into super > claiming CH tax back?
I just don't know. You will need to check with the Swiss authorities as well as Australian. Instinctively I'd have thought it unlikely that you'd need to pay and reclaim tax in CH, but I'm no expert on tax law.
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Old 12.09.2017, 13:35
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Re: Freizuegigkeitskonto [vested benefit account]

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You may have another option. If you're moving to Australia, you may be able to transfer your Swiss pension tax-free to an Australian superannuation (pension) account.
So here is small update for posteriority:

- UniSuper says that "there is currently no superannuation agreement for a direct transfer of funds between Australia and Switzerland'

- "The only way we can accept the funds from your Switzerland superannuation account is if you have the balance paid to your bank account and then transfer it to UniSuper as a member voluntary contribution"

It seems that these contributions are capped at $25k and taxed at 15% (https://www.unisuper.com.au/grow-you...-contributions) althought it seems there might be an option to claim a tax deduction (https://www.unisuper.com.au/grow-you...-contributions)

So I guess paying withholding tax in Switzerland first and then 15% in Australia is a bit of a deterrent for this solution :/
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