What happens to my pension fund savings when I take a break?

I plan to quit my longstanding job in Switzerland and take a long break. I am wondering what would happen to the money in my Swiss pension fund after I quit my job, seeing that I contribute through my employer.

Can I collect the money? Should I put it in a bank account? Or do I just leave it at the pension fund? What happens if I get another job in Switzerland after my break? Does the money automatically go from my old pension fund to my new one?

Hi there,

When you become unemployed, assets held in your former employer's 2a pension fund must be transferred to a vested benefits account. Many Swiss banks offer this type of account. You can compare interest earnings and costs using the vested benefits account comparison tool on moneyland.ch.

When you become employed again - after your break, for example - you must transfer the retirement assets from your vested benefits account to your new employers 2a pension fund.

Important: The process of transferring your assets from a pension fund to another or between a pension fund and a vested benefits account does not happen automatically. The onus rests on you to handle the administration.

Best regards from Moneyguru

It is also possible to open a pension plan with the LOB / Stiftung Auffangeinrichtung BVG. That way you can keep paying into your pillar 2 pension fund benefits and claim the tax deductions. The interest rate is similar to those of the vested benefits accounts from many banks. It's also possible to get a plan that also has disability and death insurance, in case you were getting that from your employer's pension fund.