Pension from Vested benefits savings account?

Hello, 

I’m an Italian cross-border worker. I’m leaving my current Swiss employer returning to work in Italy so I need to open a vested benefits account. I would like to receive a pension rather than a lump sum when retiring. I know the vested benefits account in general pay a lump amount but I’m wondering if there is a possibility to receive a pension instead. 

Also, in Italy the pension received from Switzerland are taxed at 5%. Do you know if this is valid also for the lump amount received from a vested benefits savings account?

Many thanks 

Currently, it is not possible to receive a pension from vested benefits as a non-resident who is not working for a Swiss employer. You can only withdraw your benefits as a lump-sum when you reach retirement age.

The compulsory portion of your Swiss occupational pension fund benefits must be transferred to a vested benefits foundation. You can withdraw these early for home ownership, a new self-employment, and several other purposes. You can also withdraw them early if you leave the EFTA and EU regions.

If you and/or your employer made voluntary payments to your pension fund, you can withdraw the voluntary benefits resulting from these when you stop working in Switzerland (even if you live in an EFTA or EU country).

When you withdraw your vested benefits, the Swiss vested benefits foundation will keep a Swiss withholding tax. You can reclaim this in keeping with the Swiss/Italian double taxation agreement. I am not familiar with the Italian tax system, or with the exact rate which applies to lump-sum withdrawals of Swiss vested benefits. I suggest you inquire about this at your local tax office in Italy.

In any case, it is generally beneficial to split your benefits between two different vested benefits foundations. This lets you cash out your vested benefits in two separate lump-sums, allowing you to withdraw over 2 different tax years.