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  #201  
Old 25.08.2014, 11:15
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Re: Swiss pensions consolidated summary

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Thanks for that, looks like it does assuming nothing has changed.
The OP needs to carefully read the qualifying criteria for this rule to apply...
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  #202  
Old 05.09.2014, 20:38
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Re: Swiss pensions consolidated summary

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Not that Im aware. However, I suspect you will need to "replenish" your pension contributions by the withdrawn amount before you get further tax deductions on your contributions, as would be the case if you withdrew the funds to buy a house or finance a business.
Thanks for the answer on my question of what happens if you withdraw the 2nd pillar amount above the mandatory obligations when you leave the country, and after a while you might return to a new job.

Meanwhile I found a note on the Credit Suisse info page on the subject that I found useful to share. It tells that, quote: "If your vested benefits were paid out in cash and you return to Switzerland contrary to expectations, the amount that was withdrawn does not have to be repaid." ( source: https://pensionskasse.credit-suisse....ns/emigration/ )

I hope it's accurate, because I had a nice time here and maybe I'll return someday . In any case, I assume that if it's not exactly like this and you must replenish the pension contributions, should be gradually (leaving you enough to live), and not all at once.
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  #203  
Old 05.09.2014, 21:53
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Re: Swiss pensions consolidated summary

I'm quite sure that is correct - you do not have to repay it.

However, as suggested by danny986 you will probably get no tax relief on future contributions until you have repaid what you withdrew.
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  #204  
Old 29.10.2014, 21:45
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Re: Swiss pensions consolidated summary

[Sorry for the double post, I just stumbled upon one more question I have. Admins, please merge the two if you want.]

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You will get a tax deduction on investment in 3rd Pillar, your taxes come later when you get the money. Depending on your tax rate it might be worthwhile.
Can I get more clarification on this?
Which tax rate is applied upon withdrawal of the money from the 3rd pillar?
If it's the same as it has been for your salary - you have no profit that way, or I don't see the math?
Is it the tax rate of the country which you are leaving to perhaps?

Thank you.
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  #205  
Old 30.10.2014, 00:26
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Re: Swiss pensions consolidated summary

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[Sorry for the double post, I just stumbled upon one more question I have. Admins, please merge the two if you want.]



Can I get more clarification on this?
Which tax rate is applied upon withdrawal of the money from the 3rd pillar?
If it's the same as it has been for your salary - you have no profit that way, or I don't see the math?
Is it the tax rate of the country which you are leaving to perhaps?

Thank you.
You dont know what tax rates will be in the future. How the 3rd pillar will be taxed if you leave CH depends on how the new country you go to live in chooses to tax the lump sum. There may just be Swiss withholding tax, or possibly taxed fully as income in your new country.
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  #206  
Old 30.10.2014, 10:20
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Re: Swiss pensions consolidated summary

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Can I get more clarification on this?
Which tax rate is applied upon withdrawal of the money from the 3rd pillar?
If it's the same as it has been for your salary - you have no profit that way, or I don't see the math?
Is it the tax rate of the country which you are leaving to perhaps?

Thank you.
First, it depends on how you are taxed. Taxed at source (Permit B, or anyone living aboard (including Swiss)) or normal tax declaration (Permit C or Swiss)?

If taxed at source the tax rate of the canton where your 3rd pillar account legally resides applies.

If regularly taxed the tax rate of your resident commune applies.

The tax rate is roughly a fifth of the tax you would pay if the withdrawn amount was your sole income for one year.

Here is a calculator:
https://www.postfinance.ch/en/priv/p...alc/cap3a.html
AFAIK it is only accurate when normally taxed, but should give a ball park figure if taxed at source.

If taxed at source and you need to know the exact figure, you have to contact the corresponding cantons tax office and request the calculation table:
Here as an example the one for Canton Zurich.
https://www.stadt-zuerich.ch/content...leistungen.pdf

Here two lists which countries a have tax treaties regarding pension payments.
First if the money/pension is from a government pension plan:
https://www.stadt-zuerich.ch/content...tlich_2014.pdf
and second if the money/pension is from a private institution:
https://www.stadt-zuerich.ch/content...tlich_2014.pdf
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  #207  
Old 31.10.2014, 22:23
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Re: Swiss pensions consolidated summary

Thank you all for your inputs.

I am taxed at source, and moreover I have only the L work permit.
So there are some extra constraints to be considered, I guess.

My thoughts have been around this:
If I reduce the taxable amount by putting X monies each month into the 3rd pillar;
And the same tax rate that I should have been taxed with applies upon withdrawing X*months money at the end of my residence in CH;
I have not really gained anything, haven't I?
It seems like it boils down to the same situation whether I put it there or not.
I admit this would need some more math, however, these are just my initial thoughts.

I have scheduled a meeting with the bank's client advisor, so I will hopefully get some more insight into the opportunities.

Thanks once again.
Cheers,
Damir
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  #208  
Old 17.01.2015, 14:46
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Re: Swiss pensions consolidated summary

According to Credit Suisse site cited earlier:

Quote:
If you are emigrating to a country which is not a member state of the EU or EFTA, you can withdraw all your vested benefits in cash.
but to prove a person needs to bring:

Quote:
Confirmation of departure from your current municipality of residence in Switzerland (with information on your marital status and the new country of domicile).
Have anyone with EU-member citizenship migrated directly to non-EFTA country (like Singapore) and went thru this procedure? I am wondering how to prove that I am moving to Singapore before actually moving there and having a local registration. Is it possible to send documents later via post to CH or use work contract from the new place as a proof while being still in CH? Or just declaration is enough?
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  #209  
Old 04.02.2015, 02:48
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Re: Swiss pensions consolidated summary

Thanks for the excellent post and summary! I have a question that I'm hoping someone might have some info about. We recently returned back to the US after many years working in CH and both my wife and I have received the payout of our Pillar II pensions from our respective funds.

She also received (from Kanton Basel-Stadt) a form to claim the refund of the withholding tax on this cash settlement by the pension fund. At the bottom of the form is a section to be completed by the foreign tax authority certifying that they are aware of the cash settlement. I am wondering if anyone has experience with the US tax authorities and was able to obtain such a confirmation from the IRS. This form was a surprise to me as I had expected to have to pay the tax in Switzerland (the US already has taxed us on Pillar II contributions and matching each year - so we're not liable for any US tax on this lump-sum payment), but I'd love to be able to claim it back.

Any information from the community would be much appreciated. Thanks in advance!
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  #210  
Old 04.03.2015, 15:39
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Re: Swiss pensions consolidated summary

I need clarification on the 3a Pillar:

Currently have two 3a accounts, both with 5y worth of statutory cap in them, both invested in 50% equity funds. Considering to either open a third one (to hold the next 5y of contributions) with an insurance company/other or just open an investment account to invest some savings.

My question is - the statutory cap for 3a: does it signify the maximum allowed contribution, as in "if you transfer more, it will be rejected" or the maximum one can deduct from taxes but essentially nothing preventing you from wiring 20k over the limit? Any regulation I should be aware of (penalties and such)?

My second and related to the above, if the investment horizon for buying property is 3-5 years, which would you vote smarter: investment account with <50% equity exposure or pumping into 3a accounts index funds with 50% equity?

Thank you
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  #211  
Old 04.03.2015, 16:32
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Re: Swiss pensions consolidated summary

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According to Credit Suisse site cited earlier:



but to prove a person needs to bring:



Have anyone with EU-member citizenship migrated directly to non-EFTA country (like Singapore) and went thru this procedure? I am wondering how to prove that I am moving to Singapore before actually moving there and having a local registration. Is it possible to send documents later via post to CH or use work contract from the new place as a proof while being still in CH? Or just declaration is enough?
After eight years in Switzerland we moved to NZ in 1991. There was no problem with withdrawing pillar 2 - I think it was enough to have deregistered with the Gemeinde. There was no check on whether we actually went to NZ.
On coming back to Switzerland in 2001, we simply continued our pillar one contributions (my wife had kept paying hers whilst in NZ). I had to start a new pillar 2 in 2001 where it is possible but not mandatory to buy back in for the missing years.
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  #212  
Old 05.03.2015, 11:34
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Re: Swiss pensions consolidated summary

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I need clarification on the 3a Pillar:

Currently have two 3a accounts, both with 5y worth of statutory cap in them, both invested in 50% equity funds. Considering to either open a third one (to hold the next 5y of contributions) with an insurance company/other or just open an investment account to invest some savings.

My question is - the statutory cap for 3a: does it signify the maximum allowed contribution, as in "if you transfer more, it will be rejected" or the maximum one can deduct from taxes but essentially nothing preventing you from wiring 20k over the limit? Any regulation I should be aware of (penalties and such)?

My second and related to the above, if the investment horizon for buying property is 3-5 years, which would you vote smarter: investment account with <50% equity exposure or pumping into 3a accounts index funds with 50% equity?

Thank you
I am unable to edit my message above - just spoke with my bank and they advised that should I wire more money into the 3rd pillar account, transfer will be cancelled and money credited back to the originating account, in other words: not possible. This is very curious - what if I had multiple accounts in multiple banks (which I do): would feeding more than one 3rd pillar with the tax deductible limit be considered fraud?!
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  #213  
Old 05.03.2015, 14:59
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Re: Swiss pensions consolidated summary

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I am unable to edit my message above - just spoke with my bank and they advised that should I wire more money into the 3rd pillar account, transfer will be cancelled and money credited back to the originating account, in other words: not possible. This is very curious - what if I had multiple accounts in multiple banks (which I do): would feeding more than one 3rd pillar with the tax deductible limit be considered fraud?!
Well as happened to me

I run my own business. When my year end accounts were completed my income was less than I had planned and had used for my 3a contributions.

Then I got a nice letter from the tax office stating that I had some extra tax to pay as part of my 3a contribution was not allowed to be set against tax. No penalty or question of fraud.
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  #214  
Old 25.04.2015, 08:40
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Re: Swiss pensions consolidated summary

A Swiss pension fund manager discusses his plight with the SNB’s negative interest rate policy. In Switzerland this policy has long ago led to negative deposit rates at the commercial banks as well. The difference to other jurisdictions is however that negative interest rates have become so pronounced, that it is by now worth it to simply withdraw one’s cash and put it into an insured vault.
Having realized this, said pension fund manager, after calculating that he would save at least 25,000 CHF per year on ever CHF 10 m. deposit by putting the cash into a vault, told his bank that he was about to make a rather big withdrawal very soon. After all, as a pension fund manager he has a fiduciary duty to his clients, and if he can save money based on a technicality, he has to do it.

“Since the national bank has introduced negative interest rates, pension funds in the country are in trouble. Banks are passing the negative rates on to them. This results in the saved pension money shrinking, instead of producing a return. A number of pension funds are therefore thinking about keeping their money in an external vault instead of leaving it in bank accounts.
One fund manager showed that for every CHF 10 m. in pension money, his fund would save CHF 25,000 – in spite of the costs involved in vault rent, cash transportation and other expenses.
However, as our research team has found out, there is one bank that refuses to pay out money in such large amounts. The editorial team has gotten hold of a letter from a large Swiss bank in which it tells its customer, a pension fund:
“We are sorry, that within the time period specified, no solution corresponding to your expectations could be found.”
Bank expert Hans Geiger says that this “is most definitely not legal”. The pension fund has a sight account, and has the contractual right to dispose of its money on demand.

“The president of the pension funds association ASIP, Hanspeter Konrad, has been irritated for weeks that pension funds are suffering from negative interest rates. He says: “We simply cannot understand that the banks are butting in here”. Konrad suspects that the National Bank is exerting its influence.
Indeed, the SNB confirms that it doesn’t like to see the hoarding of cash to circumvent its negative interest rate policy. “The National Bank has therefore recommended to the banks to approach withdrawal demands in a restrictive manner.”
Hans Giger, professor eremitus at the University of Zurich, says to this that the question how far the SNB can go is legally complicated. While the SNB is not allowed to influence the contract between a bank and a pension fund, it can however “issue directives to the banks in the collective interest of the Swiss economy”. What banks do with the SNB’s directives is however up to them.

http://www.srf.ch/news/wirtschaft/ne...eld-auszahlung
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  #215  
Old 25.04.2015, 10:21
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Re: Swiss pensions consolidated summary

Garbage is the best word I can think of to describe that! When it comes to asset allocation, Swiss pension funds have very little choice as they are regulated by law. So the amount a fund would hold on deposit has little impact on the overall fund performance.
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  #216  
Old 15.05.2015, 15:34
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Re: Swiss pensions consolidated summary

Question: is there a cap on the social security contributions (AHV) per year?
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  #217  
Old 23.05.2015, 16:58
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Re: Swiss pensions consolidated summary

if you leave for the uk is it possible to transfer pillar1 to uk private or uk state pension ? does that attract tax ? Is it better to keep it in switzerland and get your swiss pension in uk when you retire ?
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  #218  
Old 23.05.2015, 18:21
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Re: Swiss pensions consolidated summary

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if you leave for the uk is it possible to transfer pillar1 to uk private or uk state pension ? does that attract tax ? Is it better to keep it in switzerland and get your swiss pension in uk when you retire ?
No the first pillar can not be transferred, but it is taken into account in calculating your contributory pension when the time comes, the objective been to maximise the benefits due to you from your combined contributions.
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  #219  
Old 24.05.2015, 16:03
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Re: Swiss pensions consolidated summary

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if you leave for the uk is it possible to transfer pillar1 to uk private or uk state pension ? does that attract tax ? Is it better to keep it in switzerland and get your swiss pension in uk when you retire ?

You can have both a UK & CH state pension, I will get a full UK one & roughly half a Swiss one
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  #220  
Old 11.06.2015, 12:07
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Re: Swiss pensions consolidated summary

Looking for some enlightenment as I'm just about to start filling in the form to claim my UK State pension.

I'm a bit confused as to whether I need to say yes or no to part 7 of the form regarding living/working outside the UK. We've lived in Switzerland since September 1998, but I personally haven't paid into the AHV scheme as my husband pays it for me via his salary I think. So do I answer no that I haven't paid into the scheme or yes that I have? I'm not even sure I have an AHV number as I've never worked here.

And if the answer is yes how can I a) find out my number if I can't find the card anywhere and b) which social security office would I put down on the form? The cantonal one where hubby's work place was/is based or is it the one where we live?
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