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Old 12.08.2019, 12:07
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Substitute occupation benefit insitutation

My wife has quit her job 2.5 month ago. She received an letter from her former employer about transferring leaving benefit (I guess this money accumulated in BVG). She can either:
1. transfer it to new employer occupational pension fund (she doesn't have new job yet)
2. Open vested benefits account and provide it as a target for benefits transfer
3. Do not answer to the letter. Then benefit will be transferred to substitute occupation benefit insitutation.

I wanted to ask about differences between option 2 and 3? Is my understanding correct that #2 works like pillar 3a but without tax reduction benefit?
What are the terms for option #3 (when can the money be withdrew, what is the interest rate etc)?
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Old 12.08.2019, 12:08
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Re: Substitute occupation benefit insitutation

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My wife has quit her job 2.5 month ago. She received an letter from her former employer about transferring leaving benefit (I guess this money accumulated in BVG). She can either:
1. transfer it to new employer occupational pension fund (she doesn't have new job yet)
2. Open vested benefits account and provide it as a target for benefits transfer
3. Do not answer to the letter. Then benefit will be transferred to substitute occupation benefit insitutation.

I wanted to ask about differences between option 2 and 3? Is my understanding correct that #2 works like pillar 3a but without tax reduction benefit?
What are the terms for option #3 (when can the money be withdrew, what is the interest rate etc)?
2 or 3 are identical, just you choose in option 2.
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Old 12.08.2019, 12:09
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Re: Substitute occupation benefit insitutation

Go for option 2 so you are in control of the terms and conditions you agree with. Option 3 is completely out of your control and can be much less beneficial.
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Old 12.08.2019, 13:16
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Re: Substitute occupation benefit insitutation

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2. Open vested benefits account and provide it as a target for benefits transfer
3. Do not answer to the letter. Then benefit will be transferred to substitute occupation benefit insitutation.
There really is not much difference between 2 and 3. The only thing I can come up with and it's been while: Postfinance used to include the balance on the benefits account when calculating free banking.... don't know if they still do.
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Old 12.08.2019, 13:55
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Re: Substitute occupation benefit insitutation

Definitely 2 in the event of longer term unemployment - she will control the account. If it's for 2-4 months though, I would not bother and simply have the benefits transfer to the new employer's BVG plan as soon as she starts.
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