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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 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

What happens next after Switzerland’s ‘historic’ pension vote?

Swiss voters on Sunday overwhelmingly backed a proposal to increase pension payments for retirees. But what happens now?

What happens next after Switzerland's 'historic' pension vote?

In a move that is being hailed as “historic” by supporters at a time when the country’s ageing population faces surging living expenses, the newly-accepted ‘13th pension’ initiative now has to be implemented.

READ ALSO: Swiss voters approve boost to pension payments

This is what pensioners in Switzerland can expect in the coming years:

How much additional money will retirees receive?

For a full pension, single people will receive a supplement ranging from 1,225 francs to 2,450 francs per year — that is, an amount equal to their monthly first-pillar AHV / AVS pay.

Couples will receive up to 3,675 additional francs.

When will this measure take effect?

If you are hoping the 13th pension will kick in immediately, that is not going to happen; you will have to wait two years.

The new law will be implemented from 2026, which is a relatively short time, considering that many measures take years to be enforced after being accepted in referendums.

The reason for the delay of this particular new law is that the Federal Council must now decide where the extra money should come from (read more about this below).

How will the 13th pension be paid out?

It’s not yet clear, but several options will be explored.

So far, it is unlikely that the money would be paid all at once in December, according to Swiss media reports.

It could, for instance, be paid out in two installments during the year, or pro-rated and added to the AHV / AVS payment each month.

How much will the new measure cost?

This year, all the ‘regular’ first-pillar payments will cost 50 billion francs.

Once the new law goes into effect, however (that is, in 2026), an additional 4.2 billion francs will be needed.

This amount will increase as each additional generation starts to draw retirement benefits.

Where will the money come from?

As the government had warned ahead of the vote, the money that is currently in state pension accounts will not be enough, over the long term, to fund the additional payout.

In the immediate future, however, the situation doesn’t look dire — mostly thanks to the increase in the retirement age for women, which currently is 64.

But starting in 2025 and until 2028, Switzerland will gradually implement the same retirement age for women as for men — 65 — a move that is expected to boost coffers of the old-age pension scheme.

Another source of additional funding will be Value-Added Tax (VAT), which rose from the former rate of 7.7 percent to 8.1 percent at the beginning to 2024.

This extra funding, however, will not be enough in the long term, as more people retire and start drawing pensions.

This is where the burden of financing the pension scheme will fall on the younger generation.

One of the proposals of the supporters of the initiative is that employees’ and employers’ contributions to the AHV / AVS fund be increased by 0.4 percent from 2030 onwards.

Others propose introducing an inheritance tax for wealthy people. At this point, however, no definite financing plans exist.

Will foreigners in Switzerland benefit from the 13th pension as well?

Everyone who is legally employed in Switzerland and contributes into the obligatory state pension scheme will receive extra payouts, regardless of nationality.

One ‘weak’ point of the new law, as opponents have pointed out, is that all retirees in Switzerland — even those who are well off — and not just those who really need it, will receive this 13th pay.  

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