Content:

  • When you emigrate, your compulsory insurance in pillars 1 and 2 comes to an end.
  • The lump-sum withdrawal of pension fund assets is only possible to a limited extent when moving to certain countries.
  • Your pillar 3a assets can be withdrawn in full, regardless of the country of destination.
  • Make a checklist so you don’t overlook any of the important tasks that need to be completed.
  • To the conclusion
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The important aspects that you can settle before your emigration include making plans for your pension from pillars 1, 2 and 3a, as well as for your investments.

Pillar 1: OASI payment on emigration

If you move your place of residence abroad on a permanent basis, you will no longer have compulsory OASI – or pension fund – insurance. You will no longer pay contributions, but your pension entitlements acquired up to that point remain valid. When you retire or take early retirement, you will receive a pension based on your contribution years and amounts. This also applies to invalidity and survivors’ pensions.

If you move to a European Union (EU) or European Free Trade Association (EFTA) country and are employed there, you will pay into the pension system in your destination country (unless your employer has sent you to this country on secondment, and continues to pay and insure you). On retirement, you will receive a partial pension accordingly. You can have your Swiss OASI partial pension transferred either to an account in Switzerland in CHF or to an account in your new home country in the local currency. You must apply for payment of the OASI pension, preferably three or four months before you reach retirement age.

If you move outside the EU/EFTA, you can choose to pay voluntary OASI contributions until you retire in order to receive your full Swiss pension entitlements. You can only remain insured on request. This costs 10.1 percent of your earned income abroad, plus 5 percent of the contributions as administrative costs if you are still working. To benefit from OASI insurance despite not being gainfully employed, you will pay an annual contribution of between 980 and 24,500 CHF, depending on your assets and pension income. Voluntary insurance is subject to these conditions, all of which must be met:

  • Citizenship: Swiss, EU or EFTA
  • Permanent residence: outside the EU or EFTA
  • Before leaving: at least five consecutive years of OASI insurance
  • After leaving: application submitted within one year

Pillar 2: withdrawal according to age

When your employment relationship in Switzerland ends, your obligation to contribute to pillar 2 also comes to an end. What happens to your assets will depend on the country you move to.

Before retirement or early retirement

  • EU or EFTA state:
    You are generally subject to compulsory social insurance with the local pension system of your new domicile in an EU or EFTA member state. In this case, you can’t have the mandatory portion of your Swiss pension fund assets paid out to you. This portion of your OPA pension is parked in a vested benefits account or a vested benefits policy until the reference age. It can be withdrawn at the earliest five years before reaching this age. For each vested benefits case (e.g. on leaving your job), you can transfer the assets to a maximum of two accounts with different vested benefits institutions. UBS also offers the option of investing the assets in a fund savings plan on a staggered basis in order to increase potential returns.
  • Exceptions:
    The advance withdrawal of pension fund assets remains possible abroad if you use the capital saved to purchase residential property there, to pay off a mortgage or to become self-employed. You are also allowed to empty accounts without a very high balance.
  • Not an EU or EFTA member state:
    You can withdraw your entire pension fund assets when you emigrate.

Worth knowing

You can always withdraw the extra-mandatory portion of your vested benefits immediately.

On retirement or early retirement

Regardless of whether you are moving to the EU, EFTA or another country: If you wish to retire when you emigrate, you can withdraw your pension fund assets at the earliest from that year as a pension, lump sum or a combination of the two, as provided for in your pension fund regulations. With most pension funds, this is possible from the age of 58 or 60. Assets in vested benefits accounts can be withdrawn at the earliest five years before reaching the reference age. Depending on the regulations, your pension fund may decide within the early retirement period not to pay out your assets as a lump sum, but only in the form of a pension. Whether it is worth taking (early) retirement in Switzerland or waiting until you have emigrated to draw benefits depends on your individual situation.

Retired

If you are already retired and receive a (partial) pension fund pension, you will continue to receive these payments to the bank account of your choice after emigrating. If you have withdrawn a lump sum, you can leave the capital as free assets at a bank in Switzerland or transfer it to your new country of residence.

How is your retirement provision?

The free UBS Pension Check gives you a reliable overview of your current financial situation. Based on the results, you can optimize or increase your private retirement savings.

Save on taxes by withdrawing assets after emigrating

Anyone leaving Switzerland must notify the employer’s pension fund or vested benefits institution. It’s important to provide proof of your definitive departure in the form of a deregistration certificate. Your pension fund or vested benefits assets can’t be paid out until then. However, withholding tax is payable on lump-sum withdrawals. The amount varies a great deal from canton to canton, as taxation depends on the canton in which the vested benefits foundation is located. Swiss withholding tax can be reclaimed within a period of three years if a double taxation agreement exists. If Swiss withholding tax can’t be reclaimed, you should check whether you can recover anything under local law in your new country of residence.

Pillar 3a: immediate payment on emigration

You can pay your last deposit into pillar 3a before you stop working in Switzerland. As soon as you stop earning any income in Switzerland that is subject to OASI contributions, and are no longer liable for tax, it won’t be possible to make any more deposits.

If you move abroad before you retire, you can close your pillar 3a restricted retirement savings account. It doesn’t make any difference whether your assets are held at a bank or an insurance company, or which country you are emigrating to. The assets will be transferred to an account in your name. However, you can also inform the retirement savings institution that you wish to leave the credit balance in place and only withdraw it on retirement.

If you don’t want to close your pillar 3a account immediately on leaving the country, and your assets are invested in investment funds, you should check the tax implications in your new fiscal domicile abroad in advance. There is no general rule for whether it’s worth staggering payments from various pillar 3a accounts over several years if you live abroad. It depends on the tax system in your new home country.

Suitable withdrawal date

Once you have registered your new place of residence abroad and deregistered in Switzerland, the time is right to withdraw your pillar 3a assets. This is for tax reasons. After your change of domicile, a cantonal withholding tax will be due. This may be more favorable than the capital withdrawal tax that would otherwise apply. In addition to Swiss taxes, foreign taxes must also be included in your calculations. You should inquire about the amounts in the relevant country.

If the withholding tax can be refunded thanks to a double taxation agreement, proceed as for pillar 2.

Review and plan your investment strategy

If you withdraw your pension fund and pillar 3a assets when you move abroad, in the best-case scenario, you will have a large amount of liquidity available all at once. You should therefore analyze your investment strategy in advance and work out how much of this liquidity you want to invest. Your answer should take into account your financial needs and plans in life, as well as the economic environment. It’s best to discuss this with a specialist at an early stage.

Do I have a pension gap?

If the benefits from pillars 1 and 2 are not enough to maintain your desired standard of living in retirement, you’ll need to save more. Find out how much today.

Destination countries and their differences: EU/EFTA vs. non-EU/EFTA

In 2023, there were around 813,000 Swiss nationals living abroad. According to the Federal Statistical Office, two thirds of these emigrants remained in Europe. They mainly moved to France (210,000), Germany (100,000) and Italy (52,000). The main destination countries outside Europe were the USA (84,000) and Canada (41,000). The proportion of repatriates of retirement age is growing, and amounted to almost a quarter in 2023.

Check whether or not there is a bilateral social security and/or double taxation agreement in place with Switzerland.

It makes a big difference whether Swiss nationals settle in a European country or move further afield. Switzerland has concluded equivalent social security agreements with EU and EFTA countries. This means that the same rules apply to emigrants to these destination countries.

The conditions that emigrants can expect in other countries are quite different. If you are moving outside the EU/EFTA area, you will need to find out whether or not Switzerland has negotiated a bilateral social security agreement. If not, you will not be able to receive any OASI benefits, for example. The following table lists the most important differences between destination regions.

Three pillars on emigration by destination region

Pillar

Pillar

Destination country in EU/EFTA

Destination country in EU/EFTA

Destination country not in EU/EFTA

Destination country not in EU/EFTA

Pillar

OASI old-age pension (1st pillar)

Destination country in EU/EFTA

– Yes (partial pension)

– For temporary secondment and payment by Swiss employer: compulsory OASI insurance

Destination country not in EU/EFTA

– Countries with social security agreements: yes (partial pension)

– Other countries: no, contributions paid by you and your employer will be reimbursed instead

Pillar

Pension fund (2nd pillar)

Destination country in EU/EFTA

– Only limited entitlement to withdraw the mandatory portion on departure (only if emigrating on reaching retirement age and for self-employment)

– Can only be withdrawn abroad on reaching retirement age or taking early retirement

– Withdrawal of extra-mandatory assets on departure possible without restriction

Destination country not in EU/EFTA

– Full or partial withdrawal possible on departure

Pillar

Pillar 3a (3rd pillar)

Destination country in EU/EFTA

– Complete withdrawal possible

Destination country not in EU/EFTA

– Complete withdrawal possible

Risks associated with emigration

Emigration can involve a number of risks that you should be aware of. One of the biggest problems abroad can be inadequate protection in the event of illness. Certain destination countries outside the EU and EFTA do not insure Swiss immigrants in the state system. Private health insurance can usually no longer be taken out after a certain age limit. This means that healthcare is not guaranteed in retirement. This can be a serious problem if the funds available for living abroad have not been calculated generously enough.

Before emigrating, you should check whether the quality of the local healthcare system, the security situation and public infrastructure meet your requirements.

Difficulties can also arise if destination countries treat immigrants very differently to their own citizens, for example in the event of crises such as the coronavirus pandemic. Residency rules may change over time. It is important to note that if you wish to move back to Switzerland, the preparations are just as extensive as for emigration.

Conclusion

Whether before or after retirement: if you are considering emigrating, you are embarking on a major project. The extent of the adventure will depend above all on how well you prepare for it. Fortunately, you can address some issues, like making plans for your pension, early on and tick them off your list. This will take the pressure off you in the inevitably stressful period immediately before and after emigration.

Good to know

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