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PENSIONS

Reader question: Can I take my pension money with me when I leave Switzerland?

Some people decide to move out of Switzerland after working here for many years. If you leave, can you withdraw your pension money and, if so, how - and how much?

If you worked in Switzerland, can you take your money and run? Photo by Diana Parkhouse on Unsplash
If you worked in Switzerland, can you take your money and run? Photo by Diana Parkhouse on Unsplash

With over 2.2 million foreign nationals currently living in Switzerland, some may want to return to their home countries after retiring. 

With great wages and a strong job market, plenty of the foreigners who live in Switzerland only plan to stay for a limited period of time.

And it is also possible that a number of Swiss citizens decide to move to warmer climes or a less expensive retirement destination – and take their pension money with them. 

The main difference is whether you are going to live in an EU / EFTA country or a third nation.

How does the Swiss pension system work?

The Swiss pension system is made up of three pillars: AHV/AVS also known as OASI (pillar one), occupational (pillar two) and private (pillar three). 

When you pay into pillar one of the Swiss pension system, it does not represent an investment into your own personal fund or a source of capital you can tap in later life. The money you pay into the system is not kept for you, but is used to pay other people’s pensions. 

Instead, by paying into the system – which is compulsory – you get a right to a pension in later life. Generally, this right accrues after just one year.

If you want to leave Switzerland after working here, the basic principle is that if you have worked in Switzerland for a certain period of time and paid into the two obligatory pension plans— AHV/AVS/OASI, and the occupational pension — you will not lose out on a pension. 

However the amount you get will depend on several factors, including how much you paid in and where you move to after leaving Switzerland. 

EXPLAINED: How does the Swiss pension system work – and how much will I receive?

Moving to an EU / EFTA country

If you move to an EU/EFTA country, you are not entitled to be paid out your AHV/OASI pension, however due to a cooperation agreement, you will be entitled to a pension in that country. 

As for your pillar two and pillar three pensions, you will be able to cash these out. This will however be subject to cantonal taxes in many cases.

The compulsory component of your pillar two pension – known sometimes as pillar 2a – cannot be cashed out until you reach retirement age, although there are some exceptions for buying property or to fund a business. This money will be transferred to a Swiss vested benefits organisation until you reach retirement age. 

What if I move to a country outside Europe?

There are certain points you must bear in mind to ensure that you can obtain your Swiss benefits in a third country, i.e. a non-EU/EFTA nation. 

Switzerland has concluded social security agreements with: Australia, Chile, China, Bosnia and Herzegovina, India, Israel, Japan, Canada, Macedonia, Montenegro, Philippines, San Marino, Serbia, South Korea, Turkey, Uruguay, and USA.

If you are a citizen of one of the above-mentioned countries, a special agreement is in place for when you leave Switzerland for good.

The same applies if you have been recognised as a refugee or stateless person in Switzerland and settle in one of these countries under the same status.

If your destination country is on your list, you will be entitled to a pension in that country in much the same way as if you moved to an EU/EFTA country above. 

You can also be paid out your pillar two and three pensions, in a similar fashion to that above. 

What happens if you are going to a country not included on the list?

In principle, your pension lapses when you leave Switzerland. You can, however, apply, under certain conditions, for reimbursement of your accumulated OASI contributions.

This is only possible if you:

  • Have paid OASI contributions for at least one full year
  • Leave Switzerland permanently. Your spouse and children under 25 years of age also have to leave the country
  • You are not are not yet retired — that is, not  already receiving an OASI pension.

It is important to remember that if you get the reimbursement, you are no longer entitled to any further benefits.

Only the actual contributions to the OASI are paid out, without interest. Also, contributions paid for you by social assistance are not refunded.

In the event of your death, your spouse or your children may also apply for reimbursement, if they are be eligible for a survivor’s pension.

How can you request the reimbursement of OASI contributions?

You have to apply to your local compensation office or to the Central Compensation Office (SCO). To do this, you must complete this form and submit it along with the following documents:

  • Your OASI insurance number
  • Confirmation of your departure from Switzerland
  • A copy of the valid passport or another proof of your nationality

You must also provide the address of your intended foreign residence or confirmation of your current address abroad. The confirmation must also include your spouse and your children under 25.

You have to submit a request to your last employer’s pension fund institution before leaving Switzerland; your employer will provide the necessary form, which lists documents you must enclose .

READ MORE: Reader question: How long must I work in Switzerland to qualify for a pension

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For members

PENSIONS

Reader question: How long must I work in Switzerland to qualify for a pension?

If you are planning to retire in Switzerland, you may be wondering how long you need to work for to qualify for a pension. The answer depends on several factors.

Reader question: How long must I work in Switzerland to qualify for a pension?

If you are employed in Switzerland, you know that the country has a three-pillar pension system — two of them are obligatory, while the third one optional.

The first pillar is the Old Age and Survivor’s Insurance (OASI), also known as AHV in German-speaking regions, and as AVS in French and Italian cantons. The second is the occupational pension (BVG / LPP), which includes the first pillar and is compulsory for employees who earn more than 21,300 francs per year.

Under this occupational pension, employee and employer each contribute half.

Together, the two pillars aim to achieve a total pension income of 50 to 70 percent of your earnings. How much income they will generate once you retire — the current age is 65 for men and 64 for women (the latter set to increase to 65) — depends on the duration of your employment in Switzerland, as well as your income and contributions to the social scheme.

READ MORE: EXPLAINED: How does the Swiss pension system work – and how much will I receive?

A full pension — whatever amount that may be in your case — is based on average lifetime earnings and contributions to the OASI scheme. “Lifetime” in this particular context means you have been in full-time, continuous employment for 44 years if you are a man and 43 years if you are a woman.

Currently, the minimum first-pillar pension for a single person is 1,195 francs per month, and the maximum, 2,390 francs.

These calculations are based on full-time employment. If you work fewer hours, your OASI contributions (and ultimately your retirement income), will be reduced proportionally.

According to a government site, “to get a maximum pension, your average annual income will need to be at least around 86,040 francs”.

Two other factors can impact the amount of your pension — either up or downward.

One is that you haven’t worked and paid your OASI contributions for 44 years.

The other is if you stop working a year before you turn  65 / 64; in this case, your pension will be reduced by 6.8 percent, and by 13.6 percent if you retire two years early.

However, your pension will increase if you keep working beyond the statuary retirement  age.

What about foreign residents?

The two compulsory pillars of the pension scheme  — both in terms of OASI contributions and payouts after retirement — apply to anyone employed legally in Switzerland, regardless of nationality.

However, as many foreigners start working in Switzerland later than the Swiss, the amount of benefits they will receive after retirement will be proportionally lower.

You can calculate your pension here.

An important point to keep in mind is that you will keep receiving your Swiss pension even if you move out of Switzerland.

READ MORE: EXPLAINED: Everything you need to know about retiring in Switzerland

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