A new job: what happens to my pension fund assets?

When you change pension funds, the regulatory benefits usually change as well. The termination benefits from the previous pension fund may be smaller or larger than what is required for full coverage at the new fund.

If the new pension fund offers lower benefits than the previous one, your credit will be more than sufficient to obtain the full benefits. The pension fund must transfer the remaining surplus to a vested benefits institution. This leaves your accrued pension assets untouched. The surplus is parked there – either until your retirement or until you take a job whose pension fund pays higher benefits.

However, if the termination benefits are smaller than necessary, the new fund will not be able to pay the promised benefits in full. In this case, you may consider voluntary buy-ins into the new pension fund, thus closing the gap with additional contributions.

A contribution gap is the difference between the actual retirement savings in your pension fund and the maximum possible retirement savings. Gaps in the new pension fund account can also arise due to salary increases, maternity leaves, long periods of education and training, stays abroad or time off. Voluntary buy-ins are an opportunity to close the gap and receive a higher pension. You can deduct the contributions from your taxable income in the same tax year. This is especially worthwhile for older employees or those with higher incomes. Note, however, that anyone who wishes to withdraw capital within three years of a purchase must pay back the relevant taxes and cannot withdraw the purchase amount as capital.

If you have a contribution gap, it will appear on your pension fund statement.

The conditions of a pension fund can be an important consideration when changing jobs. This is because pension fund benefits can also worsen, even if you are earning more money.

That is why you should ask for the regulations and a provisional pension certificate before signing a new employment contract. Take a close look at the savings contributions from employers and employees, as well as the benefits of the pension fund and compare them with your current one. One criterion for the financial performance of a pension fund is its coverage ratio, which should be at least 100 percent. A figure of 115 percent is a sign of a solid pension fund. You should also check the disability and death benefits, as well as the conversion rate of the pension fund, which is used to convert the capital into a lifelong pension upon retirement.

If you leave your job to become self-employed, you can usually join a pension fund voluntarily. Tax-privileged buy-ins are also possible to fill gaps that may have arisen at the start of self-employment.

As a self-employed person, you have more choices regarding your pillar 2 savings than employees do. For example, when you become self-employed you can transfer your saved capital to a vested benefits account, or alternatively use it for a vested benefits policy or a vested benefits custody account.

Alternatively, you could choose a completely different option, which is to have the pension fund assets paid out and use them as start-up capital. This is also possible with the assets from pillar 3a.

You only have these options if you establish a partnership (e.g., a sole proprietorship), but not a corporation such as an AG or GmbH, where you are still considered an employee and generally have to join a pension fund.

If you leave a job and do not start a new one immediately, you can have your pension fund balance transferred to up to two different vested benefits institutions.

If you start a new job, the necessary capital will be transferred from there to the new pension fund.