Glossary
Vested Benefits Account Switzerland (Freizügigkeitskonto) — Guide 2026
Denis Smajovik
- Founder & CEO
- FINMA-registriert (F01490726)
- BSc ZHAW
- Updated 2026-04-23
What is Vested Benefits Account Switzerland (Freizügigkeitskonto)
Vested Benefits Account Switzerland (Freizügigkeitskonto)
A vested benefits account (German: Freizügigkeitskonto) is a blocked Swiss savings or investment account that holds your occupational pension capital whenever you are not affiliated with a pension fund. It comes into play when you change jobs and the gap between old and new employer means you temporarily have no pension fund, when you take a career break, when you start self-employment, or when you leave Switzerland permanently. Without a vested benefits account, your former pension fund is legally required to transfer your capital to the default collection institution (Auffangeinrichtung BVG), where the interest rate is typically lower.
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What is a Vested Benefits Account?
A vested benefits account is a tied pension savings vehicle governed by the Swiss Vested Benefits Act (Freizügigkeitsgesetz, FZG). It serves as a holding account for your pillar 2 (BVG/LPP) occupational pension savings in the following situations:
- You change employer and your new employer's pension fund is not yet in place
- You take a career break (sabbatical, further education, parental leave)
- You plan to emigrate from Switzerland
- You start self-employment and do not join a pension fund
The capital remains within the second pillar (occupational pension) framework and is blocked — it can ordinarily only be accessed at retirement.
[!tip] Early withdrawal exceptions Home purchase (WEF), permanent departure from Switzerland, starting self-employment, and disability are all recognised reasons for early access.
Vested Benefits Account vs. Vesting Policy
There are two forms of vested benefits arrangement in Switzerland:
| Feature | Vested benefits account | Vesting policy |
|---|---|---|
| Type | Bank account (pension) | Life insurance policy |
| Provider | Foundations (banks) | Insurance companies |
| Flexibility | High | Low (contractual tie-in) |
| Investments | Savings account or fund solution | Fixed by policy terms |
| Return | Variable; fund option available | Guaranteed, but lower |
| Death benefit | Paid to named beneficiaries | Integrated death cover |
| Early cancellation | Straightforward | Penalties apply |
[!tip] For most situations the vested benefits account is more flexible and less expensive. A vesting policy (Freizügigkeitspolice) only makes sense if you require additional death cover that you cannot obtain elsewhere.
What Happens to Your Swiss Pension When You Change Jobs?
When you leave an employer in Switzerland, your former pension fund has the following obligations under FZG:
- Notify you of the vested benefits amount in writing (mandatory)
- Transfer the amount to your new pension fund — if you provide the new fund's details within 30 days
- Transfer the amount to a vested benefits account — if no new pension fund is named within 30 days
[!warning] Avoid the default collection institution Always inform your former pension fund of a vested benefits account you have already opened. If you fail to do so within 30 days, the fund must send your capital to the Auffangeinrichtung BVG — the interest rate there is significantly lower than at specialist providers.
Maximum Number of Vested Benefits Accounts
Swiss law permits a maximum of two vested benefits accounts at different institutions (Art. 12 FZV). Splitting your balance across two accounts is particularly useful when the total amount is large. You can withdraw from each account in a different tax year and break the progressive capital payment tax curve — exactly the same logic as opening multiple pillar 3a accounts for staggered withdrawal at retirement.
Investment Options on a Vested Benefits Account
Just as with pillar 3a, you can invest your vested benefits capital in ETF fund solutions. For long time horizons (10+ years) an equity allocation of 60–100% is worth considering:
| Investment strategy | Equity allocation | Expected return p.a. |
|---|---|---|
| Conservative | 0–25% | 1–2% |
| Balanced | 40–60% | 3–4% |
| Growth | 80–100% | 5–7% |
Not all vested benefits foundations offer fund solutions. Avenzo can help you compare providers and switch to one offering better investment options.
Tax on Vested Benefits Withdrawal
When you withdraw from a vested benefits account, the amount is taxed as a capital payment — separately from your ordinary income, at a reduced rate. The same rules apply as for pension fund (BVG) lump-sum withdrawals:
- Taxed at your place of residence in the withdrawal year
- Reduced tax rate (in most cantons one-fifth of the ordinary rate as the basis, with cantonal variation)
- Church tax and AHV/AVS contributions may also apply
If you emigrate: when you leave Switzerland permanently, the full vested benefits balance can be paid out as a lump sum. If you move to an EU/EFTA country with compulsory social insurance, only the overobligatory portion can be immediately withdrawn — the mandatory BVG minimum must remain until retirement.
How to Open and Use a Vested Benefits Account — Step by Step
- Obtain the vested benefits certificate from your former pension fund — it states the exact amount to be transferred
- Open a vested benefits account with a Swiss bank or foundation — the process takes 1–2 business days online
- Provide your new account IBAN to your former pension fund before the 30-day deadline
- Choose an investment strategy — savings account for a short holding period, fund solution if you have 5+ years before you will need the capital
- Transfer to new pension fund — once you have a new employer, arrange the transfer from the vested benefits account to your new pension fund promptly
For a deeper look at all pension fund withdrawal scenarios — including the staggered withdrawal strategy — see the Pension Fund Withdrawal Guide.
[!info] Disclaimer
FAQ
Frequently Asked Questions
As soon as you join a new employer's pension fund (BVG/LPP), you are legally required to transfer the entire vested benefits balance to the new fund (Art. 3 FZG). Contact your vested benefits institution, provide the new fund's details, and the transfer will be completed within approximately 2–4 weeks.
Yes. Under Switzerland's residential property promotion scheme (Wohneigentumsförderung, WEF) you can make an early withdrawal to purchase your primary residence in Switzerland. The minimum withdrawal is CHF 20,000, and the option is available up to 3 years before ordinary retirement age. The amount is taxed as a capital payment at a reduced rate.
Upon permanent emigration you may generally withdraw the vested benefits as a lump sum. If you move to an EU/EFTA country and become subject to compulsory social insurance there, only the overobligatory portion can be paid out immediately — the mandatory BVG portion must remain until you reach retirement age. If you move outside the EU/EFTA area, the full balance can be paid out. In both cases, Swiss withholding tax applies at the institution's canton of domicile.
Swiss law (Art. 12 FZV) permits a maximum of two vested benefits accounts at different institutions. Splitting your balance between two accounts is valuable for tax planning: you can withdraw from each account in a different tax year, breaking the progressive tax curve on capital payments — similar to the staggered-withdrawal strategy used with multiple pillar 3a accounts.
Sources and references
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This glossary entry does not constitute individual tax or financial advice. All information without warranty — subject to legislative changes.