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  #21  
Old 22.08.2018, 17:22
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Re: Being asked to transfer 2nd pillar while at RAV

Once you are 60 you can take the money out - minus 8 percent tax.
Then invest it anyway you want.better outside switzerland.
Get it out - or you will lose it if you die. You cannot transfer it even to your wife .
This is a sneaky system. I know. Spent lots of time playing games with it.
It has a big impact if you get ill and need to use the social systems when you have a pension pot.
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  #22  
Old 22.08.2018, 20:36
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Re: Being asked to transfer 2nd pillar while at RAV

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The assets are not owned by the bank & are held in Trust, this is not like Bank accounts where the money belongs to the Bank & you are an unsecured creditor.
If it's cash in a bank account it's credit like any other that enjoys no special protection beyond the first 100k, which will be treated preferentially (*). However if the bank is a cantonal bank that's guaranteed by the canton ("Staatsgarantie", not all are) you're promised to get 100% no matter what (not necessarily in a very timely fashion though, and promises can be broken).

To protect the money you need to buy financial products, typically one of the ETFs or mutual funds available.

If OTOH your Freizügigkeitsstiftung is owned by an insurance it should be safe even if it's cash (at least in theory). Like any other obligation by a Swiss insurance, your 2nd pillar money must be covered 100% at all times.

(*) In a typical situation the 100k is per customer, not per account. However I don't know if this also applies to 2nd pillar money or if this considered separate from your other assets, nor to what extent, if any, your 3rd pillar is taken into account. The easiest thing is to have the 2nd pillar money with a bank where you have no other accounts if you can't be bothered to look up the details.
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  #23  
Old 22.08.2018, 20:59
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Re: Being asked to transfer 2nd pillar while at RAV

At age 60 can I take out the money invest it myself and carry on working.

As I have no intention to carry on working until Im 65 - 62 at most
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  #24  
Old 22.08.2018, 21:51
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Re: Being asked to transfer 2nd pillar while at RAV

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If it's cash in a bank account it's credit like any other that enjoys no special protection beyond the first 100k, which will be treated preferentially (*).
Just that the money is not in a normal bank account with the normal retail bank but with a separate special trust/foundation which is legally separated and finacially independent from the retail bank. Additionally there is protection form LOB Guarantee Fund http://www.sfbvg.ch/xml_1/internet/E...cation/f68.cfm
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Old 22.08.2018, 22:11
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Re: Being asked to transfer 2nd pillar while at RAV

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I dont get this. Im aged 60. My BVG (2nd pillar pension) says if I retire now I will get about 3.5% rising to 5% on my accumulated funds (around 280K). if I hang on to 65.

So if I become unemployed before I retire then I have to transfer it to an account that has an interest rate near zero. ?

Well I worked a long time for this pension and I would like 3.5%+ thank you very much.

The 3.5% plus is payable as long as I live. So I would potentially lose out on about 300K if I live to 80. Surely this cant be right.
Isn't the 3,5% an annual yield? From 280k it gives ~10k per year. If you live only 20 years you would take back ~200k. Working up to 65 to benefit from the 5% conversion rate: 280k => ~14k annually => 210k over 15 years

The big question is how can we know how long we are going to live?

I have heard a gossip that 'old' people are routinely dismissed to force them to move out their cash from the company affiliated 2nd pillar institution...
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Old 23.08.2018, 08:44
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Re: Being asked to transfer 2nd pillar while at RAV

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Just that the money is not in a normal bank account with the normal retail bank but with a separate special trust/foundation which is legally separated and finacially independent from the retail bank. Additionally there is protection form LOB Guarantee Fund http://www.sfbvg.ch/xml_1/internet/E...cation/f68.cfm
We're not talking about a Pensionskasse but about a Freizügigkeitsstiftung. While this is indeed a separate entity from the "owning" bank, there appear to be no benefits at all (FAQ not avaliable in English) in this regard.

The Guarantee Fund doesn't apply here because it guarantees "Leistungen" (statutory benefits) rather than "Guthaben", i.e. the beneficiary must have been retired already. As an aside, the guarantee is limited by 150% of the BVG-maximum of (currently) 84'600.
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  #27  
Old 23.08.2018, 08:59
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Re: Being asked to transfer 2nd pillar while at RAV

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Get it out - or you will lose it if you die. You cannot transfer it even to your wife .
Not (completely) true.

The widow/er will get 60% of the pensioin if
a) the marriage has lasted at least five years and the surviving spouse is older than 45 years
b) the surviving spous is responsible for at least one child that is either younger than 18, or younger than 25 and still in the education system

Some pension funds have less strict conditions.
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  #28  
Old 23.08.2018, 10:14
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Re: Being asked to transfer 2nd pillar while at RAV

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Not (completely) true.

The widow/er will get 60% of the pensioin if
a) the marriage has lasted at least five years and the surviving spouse is older than 45 years
b) the surviving spous is responsible for at least one child that is either younger than 18, or younger than 25 and still in the education system

Some pension funds have less strict conditions.

Hi, thanks for that. Sorry to jump in. Just as a matter of interest, why only 60%? Is this 60% a set rule or varies according to the pension fund. How would I make sure my surviving spouse gets 100%?


As an example, let's say my wife and I are mid 30's. I pass away (touch wood), how do I make sure my spouse gets the whole pension? In the event of the unthinkable, I would like my wife to be taken care of as far as is possible moneywise.
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  #29  
Old 23.08.2018, 10:26
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Re: Being asked to transfer 2nd pillar while at RAV

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Hi, thanks for that. Sorry to jump in. Just as a matter of interest, why only 60%? Is this 60% a set rule or varies according to the pension fund. How would I make sure my surviving spouse gets 100%?

You can´t


As an example, let's say my wife and I are mid 30's. I pass away (touch wood), how do I make sure my spouse gets the whole pension? In the event of the unthinkable, I would like my wife to be taken care of as far as is possible moneywise.
Again, she won´t get your full Säule 2 pension, unless you reach an agreement with the provider, which I highly doubt.

Take your own precautions to make sure she gets whatever you want her to get in that case
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Old 23.08.2018, 10:35
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Re: Being asked to transfer 2nd pillar while at RAV

Great info, thanks for that! I will definitely do that.



Where exactly does that money go though if you don't make the proper preparations?
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  #31  
Old 23.08.2018, 10:40
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Re: Being asked to transfer 2nd pillar while at RAV

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Great info, thanks for that! I will definitely do that.



Where exactly does that money go though if you don't make the proper preparations?
Back to the pension provider
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  #32  
Old 23.08.2018, 10:58
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Re: Being asked to transfer 2nd pillar while at RAV

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Hi, thanks for that. Sorry to jump in. Just as a matter of interest, why only 60%? Is this 60% a set rule or varies according to the pension fund. How would I make sure my surviving spouse gets 100%?
It is reduced because there is one person less to be supported.

There is a minimum set by the law. But many pension fund regulation go beyond that. You have to be aware that pillar 2 for employed people consists of two parts. One is the savings for retirement, the other is a life insurance in case you kick the bucket or get disabled before retirement age. The best option a pension regulation can provide in case you pass away before retirement age is that your heirs unconditionally get the life insurance part plus all the retirement savings.
See Art. 18 to 22 of the BVG https://www.admin.ch/opc/de/classifi...index.html#a18 and of course your pension fund regulations.

If you pass away before retirement age there are two options:
1) The pension fund sticks to the law then the widow gets 60% of the corresponding disability pension if eligible or lump sum payment of 3 years worth of (widow?) pension if not eligible for a pension.
2) The pension fund offers better terms.

There is not much to optimize here except to look for an employer with a good pension fund or to use your voice as an employee.

If you pass away after retirement age there are two options:
1) If you get a pension, it will be reduced to 60% if eligible for widow pension, otherwise the widow gets a lump sum payment of 3 years worth of (widow?) pension (unless pension fund regulation have better terms).
2) If you paid out part or all of pillar 2 it is treated like any other fortune and wealth.

Apart from being employed right before retirement by an employer with a good pension fund you can pay out all or part of the pension fund and convert it to free wealth. But you will trade a guaranteed lifetime rent vs. capital. If you know that you will die soon after retirement and want to leave most to the heirs than go for the payout.

AFAIK when the pillar 2 money is parked in vested benefit account or depot the heirs get the full amount.
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  #33  
Old 23.08.2018, 13:49
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Re: Being asked to transfer 2nd pillar while at RAV

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It is reduced because there is one person less to be supported.

There is a minimum set by the law. But many pension fund regulation go beyond that. You have to be aware that pillar 2 for employed people consists of two parts. One is the savings for retirement, the other is a life insurance in case you kick the bucket or get disabled before retirement age. The best option a pension regulation can provide in case you pass away before retirement age is that your heirs unconditionally get the life insurance part plus all the retirement savings.
See Art. 18 to 22 of the BVG https://www.admin.ch/opc/de/classifi...index.html#a18 and of course your pension fund regulations.

If you pass away before retirement age there are two options:
1) The pension fund sticks to the law then the widow gets 60% of the corresponding disability pension if eligible or lump sum payment of 3 years worth of (widow?) pension if not eligible for a pension.
2) The pension fund offers better terms.

There is not much to optimize here except to look for an employer with a good pension fund or to use your voice as an employee.

If you pass away after retirement age there are two options:
1) If you get a pension, it will be reduced to 60% if eligible for widow pension, otherwise the widow gets a lump sum payment of 3 years worth of (widow?) pension (unless pension fund regulation have better terms).
2) If you paid out part or all of pillar 2 it is treated like any other fortune and wealth.

Apart from being employed right before retirement by an employer with a good pension fund you can pay out all or part of the pension fund and convert it to free wealth. But you will trade a guaranteed lifetime rent vs. capital. If you know that you will die soon after retirement and want to leave most to the heirs than go for the payout.

AFAIK when the pillar 2 money is parked in vested benefit account or depot the heirs get the full amount.
But this thread is about money in a freizugigkeits konto.
It is another ball game.
There is no insurance involved. The money is just dumped into a bank account
You have to think differently.
You cannot touch the money unless you are 75% IV - in my case i am 100 %. Or the usual ways - buy a house - self employed. ( only 20 months to 60 anyway)
At 60 you can take it out - but I think if it is tied ino a pension fund then they hold some back. (Probably the insurance element) With a freizugigkeits konto then you have broken a chain and can take it all.
I have a meeting next week with my bank so will let you know if what I presume is true or not
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  #34  
Old 23.08.2018, 14:04
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Re: Being asked to transfer 2nd pillar while at RAV

By the way.
It was funny to hear that you only lose 40 percent of your pension if you die.
This is a lot of money.
Better take it out when you are alive and invest it with a good will. Do not trust the swiss system to look after your wife. I have first hand experience with my sister in law. Her husband worked all his life for ABB and when he died the money went walkabouts into the Swiss black hole - now she lives like a street urchin.

Last edited by jbrady; 23.08.2018 at 14:27.
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  #35  
Old 17.05.2019, 13:49
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Re: Being asked to transfer 2nd pillar while at RAV

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Why is it a "rip off" to cancel your mortgage early ?


If it's fixed, it's a contract that you need to honour. The bank gives you the mortgage, they go out and "buy" the necessary funds, add their commission on top and that's it.


You cancel early, why should the bank take the cost ?


I was reading about pension funds and saw this comment about Raiffeisen bank, so better late than never: For Libor mortgages, Raiffeisen charges a penalty of 0.1% per month (therefore 1.2% per year) on top your normal interest charges if you cancel your mortgage early. This is not stated in your mortgage documents but in their summary of bank charges which changes from time to time (this is from 2017 and still valid until 2018). I think the amount has changed in the mean time for mortgages as of 2019, but for me it was certainly a rip-off.
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  #36  
Old 17.05.2019, 14:30
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Re: Being asked to transfer 2nd pillar while at RAV

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AFAIK when the pillar 2 money is parked in vested benefit account or depot the heirs get the full amount.
Yes, that is what happened when my wife died.

Tom
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  #37  
Old 17.05.2019, 16:35
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Re: Being asked to transfer 2nd pillar while at RAV

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I was reading about pension funds and saw this comment about Raiffeisen bank, so better late than never: For Libor mortgages, Raiffeisen charges a penalty of 0.1% per month (therefore 1.2% per year) on top your normal interest charges if you cancel your mortgage early. This is not stated in your mortgage documents but in their summary of bank charges which changes from time to time (this is from 2017 and still valid until 2018). I think the amount has changed in the mean time for mortgages as of 2019, but for me it was certainly a rip-off.



LIBOR are usually floating mortgages, 3 months or 6 months which roll over at each period either with same or slightly different interest rate.
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Old 18.05.2019, 21:16
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Re: Being asked to transfer 2nd pillar while at RAV

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LIBOR are usually floating mortgages, 3 months or 6 months which roll over at each period either with same or slightly different interest rate.
Yes, but at Raiffeisen, your Libor mortgage is either for 3 years or 5 years, within which the floating rate is charged for 3/6 month period. If you cancel your mortgage with 1 year of the contract left, you have to pay 1.2% on top of the remaining interest rates (for 3/6 months).
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