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Old 05.02.2018, 14:37
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Planning to move to USA - Pillar 2

Dear all,

I have read many threads on US taxation on Pillar 2, but none directly applies in my situation.

I am an Indonesian citizen and C-permit holder in Switzerland.
I plan to move to the USA to take up a new job there in August 2018.
I understand that it is possible for me to cash out my pillar 2 contributions upon my departure from Switzerland.
There will, of course, be a Swiss tax on the cash-out.
What I am not so sure about is how the IRS of the USA will treat this, and whether I will have to pay US tax on it.
In 2018, I will still be a tax resident of Switzerland but will need to file a non-resident tax return for the USA.

I would appreciate any information that you kind folks can share.
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Old 05.02.2018, 16:00
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Re: Planning to move to USA - Pillar 2

In practice they tax it as ordinary income. Withdraw and make sure to get paid before you step on US soil.
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Old 20.04.2018, 17:36
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Re: Planning to move to USA - Pillar 2

I am in a similar position right now and struggling to understand what happens to the purchases ("rachats") made into the 2nd pillar over the last three years.

On the one hand, my bank tells me that I cannot set up a vested benefits account as an American citizen going back to the USA. On the other hand, my insurance company tells me that I cannot withdraw the voluntary contributions (in cash) unless they are older than 3 years.

Which one is true?

In case I do need to park the money in a Swiss vested benefits account, do you have any recommendation regarding the institution to place it at? I know I should choose a low tax jurisdiction but I am also concerned with trading and custody fees. If possible, I would do away with all wealth management services (and fees) and do the trading myself, albeit on a restricted set of securities.
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Old 26.04.2018, 20:03
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Re: Planning to move to USA - Pillar 2

I don't believe US citizens are eligible for a vested benefits account, so I think they will simply pay it out in cash. I'm leaving the country soon so also going through this.

Regarding requiring contributes to be 3 years old, I haven't ever heard anything about that. I would be surprised if that were the case if you are deregistering and leaving the country.
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Old 27.04.2018, 02:19
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Re: Planning to move to USA - Pillar 2

Quote:
I am in a similar position right now
No you're not, the difference is OP is not US citizen, at least I hope so. Changes everything.

Quote:
On the one hand, my bank tells me that I cannot set up a vested benefits account as an American citizen going back to the USA.
Yes, toxic passport. Only a few banks deal with your kind as I'm sure you know, start by calling all three of them

Quote:
my insurance company tells me that I cannot withdraw the voluntary contributions (in cash) unless they are older than 3 years.
Then why the f**k did you pay? Didn't you read the fine print?

Legally though there's no strict requirement for them to hold onto your money for 3 years. The law merely says that until this deadline passes you can have it back but you'll just have to cough up all the swiss taxes you didn't really save because they went straight to IRS instead towards financing local swiss schools etc. And good luck getting even a penny for it from IRS now.

In their own AGBs I know some funds prescribe that yes they'd very much like to hold onto your voluntary contributions money for 3 years, I know AXA does this crap. Go and beg them for a solution yourself, it's between you and them only. My guess they'll stick to it for 3 years, charge an arm and a leg for it in administrative expenses, then pay to wherever you say and maybe pocketing a percent or two too on fx conversion "for your convenience"

Quote:
Regarding requiring contributes to be 3 years old, I haven't ever heard anything about that. I would be surprised if that were the case if you are deregistering and leaving the country.
The question was specifically about voluntary contributions. Noone forced him to pay these and he should've done the math beforehand
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Old 05.05.2018, 08:14
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Re: Planning to move to USA - Pillar 2

Hello! I' an US citizen leaving Switzerland shortly and have learned that the taxes you will pay on the 2nd pillar are tied to the canton where the pension fund is located. In my case the pension fund is in basel (est, 7% tax witholding). I will be transferring the money to a fund in a lower tax canton and even w/ the admin fees I'm still saving 2% tax on the entire amount. PM me if you'd like more details. Regards, C
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