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Vested benefits account for tax and strategic purposes

Vested benefits accounts and vested benefits deposits are essential components of the Swiss pension system and play a significant role for many employees in Switzerland. The pension fund capital of the second pillar often represents the largest asset class for an employee.

Professional advice on vested benefits is crucial to making the best decisions for your financial future.


Trust Insurance is available to provide you with more information about the second pillar.

What is a vested benefits account?

A vested benefits account is a pension vehicle of the second pillar in Switzerland. When you leave your job, your pension fund assets are temporarily or permanently transferred to a vested benefits account or vested benefits deposit. It is crucial to inform yourself about your options in a timely manner to avoid unnecessary losses.

Purpose: It ensures that the accumulated retirement assets are preserved and cannot be spent prematurely.

Deposits
: When an employee changes employers but does not yet have a new pension fund, the existing assets are transferred to a vested benefits account.

Usage
: The funds in the vested benefits account continue to earn interest and can be used for purchasing residential property, starting a business, or in the event of permanent emigration.

Management
: Vested benefits accounts are managed by banks or insurance companies and often offer various investment options, similar to regular pension plans.

Tax Advantages
: The assets in a vested benefits account remain tax-advantaged until they are withdrawn.

In summary, a vested benefits account is an important pension arrangement that ensures the seamless transition of pension assets during a job change or other professional changes.

HOW DO I OPEN A VESTED BENEFITS ACCOUNT?

To open a vested benefits account, inform your current pension fund where your vested benefits should be transferred. Provide all the necessary information for the transfer.

For further information, we are always available for a personal consultation.

Compare vested benefits accounts

Trust Insurance offers you a range of vested benefits accounts to compare, evaluated based on various criteria. Which provider suits you best should be discussed in a personal consultation.

Here are a few ideas on where you could invest your vested benefits:

 

Viac: Digital App
Advantages: Independent and digital investing – Cost-efficient
Know-how: Preferably some investment experience is advantageous
Limitations: Flexibility in investment strategy
Location of the pension foundation: Basel

 

 

ZKB Frankly: Digital App
Advantages: Independent and digital investing – Cost-efficient
Know-how: Preferably some investment experience is advantageous
Limitations: Limited fund selection – Investment classes are very Swiss-focused
Location of the pension foundation: Zurich

 

Everon: Digital App
Advantages: Family office approach – Large selection of funds, individual securities, and proprietary funds
Know-how: Option to create a custom portfolio if desired
Limitations: Access only through partner network
Location of the pension foundation: Schwyz

 

Liberty: Interesting Alternative
Advantages: Actively and passively managed funds – Large fund selection
Know-how: Own responsibility
Limitations: It is advisable to seek consultation beforehand
Location of the pension foundation: Schwyz

 

Swiss Life: Interesting Alternative
Advantages: Actively managed funds with excellent performance
Know-how: Minimal know-how needed due to the limited selection
Limitations: Only Swiss Life products available
Location of the pension foundation: Zurich

 

PensExpert: Interesting Alternative
Advantages: Actively managed funds
Know-how: Only PensExpert available
Limitations: Limited selection, only accessible through sales partners
Location of the pension foundation: Lucerne

 

We are happy to advise you when it comes to making your personal decision.

What criteria do I have to pay attention to?

Performance: Is the assumed investment risk in line with the associated return?

Costs: How high are the annually recurring costs compared to other providers?

Investment horizon: How long does it make sense to invest the vested benefits?

Investment risk: How much risk can I take with my total assets?

Asset classes: Which asset classes make sense, and do I already own these assets elsewhere?

Diversification: Is my risk sufficiently spread?

Goal: What goal am I pursuing with the investment of my vested benefits account?

VESTED BENEFITS ACCOUNT CONSULTATION

Unabhaengiger_Finanzberater_Versicherungsberater_Schweiz

Marlon Recine
CFP – Certified Financial Planner
Over 10 years in the investment business

We are pleased to introduce our experts and provide you with an initial basis for making a decision about a personal collaboration.

Our advisors and network are always available to assist you with any pension questions.

Book a free initial appointment or contact us via E-Mail

WHEN DOES THE TRANSFER TO A VESTED BENEFITS ACCOUNT TAKE PLACE?

After you leave your job, your last employer’s pension fund holds your vested benefits for about six months. If you do not take any action during this time, the vested benefits will automatically be transferred by your last pension fund to any vested benefits account. The pension fund is legally required to remind you where you want the money transferred. Therefore, it is advisable to know what you want to do with the funds.

WHERE CAN MY VESTED BENEFITS BE TRANSFERRED?

The vested benefits can be transferred to any vested benefits account or vested benefits deposit of your choice. Important: The pension circle of the second pillar BVG must not be left. Exceptions for an early withdrawal of the vested benefits are described further below.

INTEREST ON THE VESTED BENEFITS ACCOUNT

Depending on the financial market situation, the interest rates on the vested benefits account may be higher or lower. In times of high inflation, the interest rates are usually higher. Whether this is sufficient to counteract inflation depends on how long you intend to leave the vested benefits in your account.

Trust Insurance  is happy to independently and transparently review your situation to find the most suitable pension provider.

WHO IS RESPONSIBLE FOR THE TRANSFER OF THE VESTED BENEFITS?

You are responsible for deciding how your vested benefits are invested, where your money should be transferred, and whether you want to open a vested benefits account or a vested benefits deposit. Nothing happens automatically

WHAT IS THE DIFFERENCE BETWEEN A VESTED BENEFITS ACCOUNT AND A VESTED BENEFITS DEPOSIT?

A vested benefits account is a risk-free account solution with little to no interest. It is perfect for very short-term transitional solutions or shortly before a regulatory payout.

PAYOUT OF THE SECOND PILLAR WHEN MOVING ABROAD

When permanently leaving Switzerland with the intention of cashing out your pension fund money or closing the vested benefits account, you should contact a tax expert. Depending on the country and the timing of the payout, this can have very high tax consequences.

PAYOUT AND CLOSURE OF VESTED BENEFITS ACCOUNT / DEPOSIT

A vested benefits account or deposit can be dissolved under the following conditions:

  • Purchase of owner-occupied residential property
  • Early retirement – five years before the regular retirement age

  • Receipt of a full disability pension

  • Commencement of a full-time self-employed activity

  • Insignificance (when the current vested benefits are smaller than your personal annual contribution)

  • Permanent departure from Switzerland in accordance with the applicable provisions of the Vested Benefits Act (FZG)

    • For EU/EFTA countries, only the supplementary portion of the pension fund

    • For countries outside the EU/EFTA, both the mandatory and supplementary portions of the pension fund

REPAYMENT OF VESTED BENEFITS FROM EARLY WITHDRAWAL

According to Article 30d of the BVG from 2024, the amount withdrawn must be repaid to the pension fund by the insured person or their heirs if:

a. The residential property is sold;

b. Rights to the residential property are granted that are economically equivalent to a sale; or

c. No pension benefits are due upon the death of the insured person.

Contact us at Trust Insurance for independent and professional advice on your vested benefits account and benefit from our expertise.

For more important information, refer to the online BVG law collection.

OUR PROCESS

With the placement of the vested benefits, the actual management of your asset portfolio begins for us. We understand our service as a cycle. Our team carefully and continuously manages your vested benefits.

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