Hi everyone,

I have lived in Switzerland for 7 years and will be moving soon to take up a new job in the US. I was astounded recently when I was informed by two successive Swiss banks that due to the complicated reporting requirements for US residents, it would be better for me to simply cash out my Swiss pension rather than put it into a Swiss vested account. One of the bankers spoke ominously of the risks to be incurred if I didn't declare the overseas investment while in the US, which will have US tax applied, and that keeping the pension funds in Switzerland would amount to risking 'big potential problems for a relatively small amount'. I'm dismayed that I won't be able to keep my Swiss pension funds in Switzerland simply because I will be moving to the US....and am not even a US citizen! Has anybody encountered this problem? Is there no other option than to take the money and leave? Any advice most appreciated!

Are you EU? Then maybe you are allowed to transfer it to an EU pension?

What your bankers are telling you is more or less correct. If they or you declare your investment here then it will be taxed by the Americans IF they can associate a social security number to it. The information you have provided does not give any potential to answer your question other than to say the bankers could be correct but...

But if you are not an American citizen then you can tell the bankers that you have had a change of mind and are now going to live somewhere else where there is no tax treaty and therefore you would like your money to be in a vested account here.

Then finally there is the big question. Why do you not want to cash the pension in and take the money?

Is this at all possible? I always thought no pension plan in the EU allowed bringing in money...

Thanks for letting me know
Cristina

Yes it is possible and yes they do - but of course not all not in every country and only from specified sources...

This changed around 2001/2 with an EU regulation that pension fund amounts, are a right and are transferable. Prior to this there were rules such as pension rights are only available to workers after 10 years and non-transferable etc. The problem with such restrictions is that they impose unfair constraints on the employees - you could for example have somebody working for 9 years and then sack them etc.

I don't see a big advantage of keeping the money in a vested account (what are the investment options in these accounts?, if it anything like a regular pension plan you might earn 2%?), I think you could do better than that on your own, even investing in a money market, extremely low risk account in the US.