Switzerland's second pillar (Säule 2 / BVG) is a mandatory occupational pension for all employees earning over CHF 22050/year — split 50/50 between employer and employee. For expats, the most important question is: what happens to your pension savings when you leave Switzerland? Withdrawal is possible as a lump sum on permanent emigration to a non-EU/EFTA country, or for a primary-residence purchase (minimum CHF 20000). Source: Federal Social Insurance Office (BSV) — Occupational Pensions.
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How the Swiss Pension Fund Works
| Feature | Details |
|---|---|
| Mandatory entry threshold | CHF 22050 gross salary/year |
| Coordination deduction | CHF 25725 (subtracted before contributions apply) |
| Contributions | Split 50/50 employer and employee |
| Minimum interest rate (2025) | 1.25% on BVG minimum |
| Conversion rate (retirement) | 6.8% minimum (BVG obligatory portion) |
What Happens When You Change Jobs?
Your pension savings (Freizügigkeitsleistung) must be transferred within 6 months to either:
- Your new employer's pension fund, or
- A Freizügigkeitskonto (vesting/preservation account) — a parking account while between jobs
You can have up to 2 Freizügigkeitskontos at different institutions. Popular options: VIAC, Frankly, PostFinance, Zürich Kantonalbank.
Withdrawing Your Pension When Leaving Switzerland
If you leave Switzerland permanently (emigrate), you can withdraw your entire Säule 2 savings as a lump sum:
| Destination | Tax treatment |
|---|---|
| Non-EU/EFTA country | Full withdrawal possible, taxed at source (reduced rate) |
| EU/EFTA country | Only the overobligatory portion can be fully withdrawn; BVG minimum must stay until retirement age unless country is outside social security agreement |
Tax on withdrawal: Taxed separately from income at a reduced rate (approx. 5–8% depending on canton). Use the Staffelung strategy if possible — spread payouts across multiple years.
Early Withdrawal for Property Purchase (WEF)
You can withdraw pension savings before retirement to buy your primary residence in Switzerland:
- Minimum CHF 20000
- Only every 5 years
- Repayment required if property sold (unless retirement age reached)
- Tax implication: lump sum taxed like regular withdrawal
This guide is for informational purposes only and does not constitute individual tax advice. All information without guarantee.
Frequently Asked Questions
Only if you are leaving Switzerland permanently and moving to a country outside the EU/EFTA social security area. Otherwise, the mandatory BVG portion must stay until retirement age.
Yes. Forgotten Freizügigkeitskontos can be reclaimed. The Swiss Central Vesting Benefits Fund (Auffangeinrichtung BVG) maintains a central register. Search at sfbvg.ch to locate your assets.
It depends on the double taxation treaty between Switzerland and your home country. Many treaties give the right to tax pension income to your country of residence. Check the specific treaty or consult a cross-border tax advisor.
Yes. You can hold up to 2 Freizügigkeitskontos at different institutions. This is useful for the Staffelung strategy — withdrawing from each account in different tax years to reduce the overall tax burden on the lump sum.
If you move to an EU/EFTA country, only the overobligatory portion can be fully withdrawn. The BVG minimum (mandatory portion) must remain in Switzerland until you reach retirement age, unless the destination country has no comparable social security system.
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