Moving vested benefits to low-tax canton before leaving Switzerland

Dear Sir / Madame,

I would like to request your assistance in determining whether or not it is advantageous to open a vested benefits account in a low-tax canton ahead of leaving Switzerland and relocating to another country.

I am not leaving Switzerland just yet, but I would like to get informed about this ahead of time.

Thank you and good day

Hi there,

If you plan to relocate from Switzerland to another country, transferring your 2a pension fund savings to a vested benefits foundation in a low-tax canton is a good financial move.

You must give up residence in Switzerland before you can withdraw 2a assets - or the non-compulsory portion of 2a assets if you relocate to an EU or EFTA country.  As a non-resident, you are no longer subject to Swiss income tax. Instead, a withholding tax is deducted from your 2a savings before they are paid out. This tax is levied by the canton in which the vested benefits foundation is headquartered.

Withholding taxes vary broadly between cantons. The canton of Schwyz has consistently offered some of the lowest withholding tax rates on retirement asset withdrawals in the country.

You can transfer your 2a assets from one Swiss vested benefits account to another - in any part of Switzerland - at any time you choose. If you are transferring vested benefits from one bank to another, be aware that some banks charge transfer fees.

As a general rule, banks do not charge annual account fees for vested benefits accounts. Some vested benefits foundations charge high fees when you withdraw your assets ahead of retirement due to emigrating.

All major fees and charges - including possible charges for advanced withdrawal due to emigration - are clearly listed in the cost breakdowns corresponding to each account listed in the moneyland.ch vested benefits account comparison.

Important: As long as you remain employed in Switzerland, your 2a assets must be held by your occupational pension fund. You may only transfer 2a savings to a vested benefits foundation from your pension fund after your employment ends.

Best regards from Moneyguru

More on this topic:
Vested benefits account comparison
Vested benefits accounts: possible costs