2nd Pillar Pensions

The 2nd Pillar (BVG) pension is an occupational pension in Switzerland, mandatory to those in employment above the lower earnings threshold and above the age of 25. 

It’s funded by both employer and employee, and also contains accident insurance (UVG). It may also include disability, widow, and orphan benefits.

The 2nd pillar pension can be used before you retire but only under certain conditions; to buy a home, open a business, or when you leave Switzerland permanently. 

Leaving Switzerland and need advice on what to do with your 2nd pillar? Start Here.

If you're moving to an EU/EFTA country, Pillar 2a (mandatory) benefits cannot be withdrawn until normal retirement age (or up to 5 years before).

Instead, the money in your Pillar 2a will need to be deposited into a vested benefits account in Switzerland. If you do not instruct your company where to send your pension, it will be transferred to the SOBI (State Occupational Benefit Institution), currently returning 0.01% p.a. check the interest rates.

However, Pillar 2b (non-mandatory) monies can be withdrawn even when relocating to a EU/EFTA country.

The benefit however, if taken, is that transferring to a vested benefits account of your choice can give you complete control over what you now invest your money into.

When moving to a country outside of the EU/EFTA, all funds in the company pension can be withdrawn. 

However, one must consider carefully whether it makes sense to withdraw their pension funds pre-retirement, or continue to invest them within a vested benefits solution of their choosing, benefitting from tax-free growth while within Switzerland.

If you would like to know more about how the system works, you’re leaving employment or Switzerland and need to know what to do with your vested benefits, or learn how best to plan for your retirement, contact us now to schedule a call or appointment with one of our qualified advisers.