Moving abroad? Here’s what happens to your Vested benefits 

When you leave your job and don’t immediately take up another salaried position in Switzerland, your BVG assets, meaning your occupational pension savings, are transferred to a Vested benefits account. Think of it as a secure, temporary parking place for your money, while you decide what to do next. 

But what happens if you move abroad permanently? Can you withdraw this money, or does it have to stay in Switzerland? The answer depends on your destination. Here’s what you need to know. 

If you move to an EU or EFTA country 

You won’t be able to withdraw the full amount. Swiss law distinguishes between two parts of your second pillar: 

• the mandatory portion, defined by occupational pension law 
• the extra-mandatory portion, meaning contributions or benefits above the legal minimum 

If you move to a country in the European Union or the EFTA, such as Iceland, Norway or Liechtenstein, you cannot withdraw the mandatory portion. It must remain in Switzerland, on a Vested benefits account, until the AHV reference age, in other words the legal retirement age. 
An exception applies only if you can prove that you are not subject to a social security system in your destination country. 

The extra-mandatory portion, however, may be withdrawn under certain conditions. Make sure to check with your pension fund or your Vested benefits provider to understand exactly how your assets are split. 

If you move to a country outside the EU or EFTA 

Good news: if you leave Switzerland for a country outside the EU or EFTA, you can generally withdraw your entire second pillar, including both the mandatory and the extra-mandatory portions. 

This withdrawal is usually allowed if you can prove that you are leaving Switzerland permanently. Typical documents include a certificate of departure, deregistration from your municipality, or proof of a new address abroad. 

Be aware, though, that this withdrawal is not completely free of tax. You will have to pay a withholding tax on the capital paid out. The rate depends on the canton where your Vested benefits foundation is domiciled. The upside is that this tax is often moderate compared to standard income taxation. 

Some expatriates even choose the canton where their Vested benefits account is held in order to optimise this exit tax. For example, cantons such as Schwyz or Zug apply lower rates than Geneva or Vaud. A strategy worth knowing. 

Pilla’s advice: plan ahead and stay informed 

Before packing your bags, take the time to inform yourself thoroughly about the tax rules and withdrawal conditions. Each country has its own specifics, including how foreign capital is taxed, double taxation agreements, and reporting obligations. A withdrawal that is rushed or poorly planned could cost you tax advantages and therefore money. 

Also think about what you want to do with this capital: withdraw it and spend it, transfer it to an account abroad, or leave it in Switzerland and invest it through a Vested benefits account. All these options exist, as long as you understand their implications. 

At Pilla, we’re here to help you see things more clearly, compare possible scenarios and choose the solution that best fits your plans to move abroad. The goal is simple: to let you leave with peace of mind, without leaving your second pillar to chance.