Vested benefit account transfer

Hi,

Can a vested benefit account be transferred to an ex-partner (after divorce filed abroad - not in Switzerland) if the owner of the account agrees? Not paid out but transferred to the ex-partner’s swiss pension fund or vested benefit account?

In return the ex-partner would then agree to give up his entitled half of a property abroad. This would be included in the mutual consent agreement of the divorce.

My reason for asking is that the occupational pension assets (2nd pillar) will be split in half anyway, and only a Swiss court would allow any deviation to that based upon proof of combined assets. 

The outcome of the Swiss court ruling is uncertain no matter what marriage contract existed or what has been agreed in the separation agreement filed abroad and approved by a court outside Switzerland.

A payout of 2nd pillar assets is also possible because the ex-partner who would prefer to keep the house abroad already lives abroad.

So it boils down to one question: Can someone transfer his/her vested benefit account to someone else and what are the possible options.

Thanks in advance for helping out here. This is my first post so I’m curious.

Hi Robbert.eijggendaal,

It is not possible to transfer a vested benefit account from one person to another. But transferring benefits to a spouse's pension fund or to a purpose-created vested benefits account is possible in the case of divorce.

It is important to note that pillar 2 occupational pension fund benefits are not the same thing as bank account balances. This holds true for vested benefits accounts as well. Pillar 2 benefits are more closely related to insurance. The insured individual has the right to claim either a lump-sum benefit or a life annuity, but only in keeping with the terms and conditions of the policy. Benefits can only be transferred to another individual under very specific circumstances.

In the case of a divorce, the standard procedure stipulated by law is the splitting of combined pillar 2 assets acquired by both partners during the marriage. However, if partners agree on a different arrangement, they are free to propose this to a Swiss court. The court has the authority to pass judgement in favor of the arrangement proposed by the partners.

The case must be handled by a Swiss court, as these have the authority to pass judgement and to submit court orders to Swiss occupational pension funds and vested benefits foundations. If the divorce was handled outside of Switzerland, it judgement of the foreign court must be upheld by a Swiss court.

A deviation from standard splitting can only be proposed during a divorce and judged on a case-by-case basis. It is not possible to agree on a deviation in advance via a marital agreement or a pre-nuptial agreement.

Once a court judgement has been reached, benefits can be transferred between pillar 2 pension funds and/or vested benefits foundations as per court orders.

Note: The cost of court services in Switzerland is relatively high, and this should be accounted for. Typically, the costs are split between both partners. It is also important to note that even if partners have agreed to a proposal, the final judgement rests with the court.

Best regards from Moneyguru

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