Vested Benefits Account

If you change employers but do not immediately take up the new position, you can transfer your pension fund savings to a vested benefits account. You decide exactly where.

This may be the last opportunity to benefit from the tax deduction through a contribution to your ‘old’ pension fund. In addition, when leaving the pension fund, you have the option to split the savings and transfer them to two different vested benefits foundations.

Whether making a contribution or splitting the funds is worthwhile, or whether the savings should be fully transferred to the new pension fund, must be considered and evaluated individually. We are happy to assist you with this.

Are you planning to emigrate?

Depending on the destination country, different regulations apply regarding the withdrawal of vested pension benefits, as well as other tax considerations that must be clarified in advance.

Choosing the right vested benefits foundation is also crucial, because when the capital is eventually withdrawn, it is taxed at the location of the foundation, i.e., at the source, and the differences in cantonal tax rates are significant.

In the event of a divorce, the retirement assets, accumulated during the years of marriage in the pension fund, are split equally. It does not matter what marital property regime you agreed upon at the time of marriage. The only exception is possible extra contributions made from separate property.

If one of the spouses is not affiliated with a pension fund, the divided retirement assets are transferred to a vested benefits account. If both spouses are insured with a pension fund, but the amount to be transferred significantly exceeds the purchase amount, the overall situation must be examined in greater detail.

Planning prior to the preparation of the implementation declaration is essential and often leads to considerable opportunities for tax optimization.

As with a ‘break in employment,’ the pension fund assets are first transferred into a vested benefits account. Depending on the chosen legal form of the newly established company, the vested benefits may be drawn for the purpose of starting self-employment. This is only permitted for partnerships, as one is considered an employee in a corporation (Ltd., AG).

The withdrawal must be made within one year of establishing self-employment.

A withdrawal may only be made from the entire vested benefits account. For this reason, it is advisable to plan in advance and possibly consider splitting the balance between two accounts.

The timing of a possible early retirement is governed by the regulations of the pension funds. With most providers, one can retire at the age of 58 and at that time decide between a pension, a lump sum, or a combination of both.

Before this point, the pension fund assets must be transferred to a vested benefits solution.