What Happens to Your Pension Savings?#
Upon leaving an employer, you are entitled to your full vested benefits (Freizügigkeitsleistung / Prestation de libre passage). Under federal law, these assets cannot simply be cashed out; they must be transferred directly to your new employer's pension fund.
The Step-by-Step Transfer Process#
Your previous fund issues an exit statement. You provide them with the transfer details and paying-in slip from your new employer's pension scheme to execute the asset transfer seamlessly.
What if There is a Gap Between Jobs?#
If you take time off between positions, your retirement funds must be deposited into a temporary vested benefits account at a Swiss bank or insurance company.
Reading Your New Pension Certificate#
Review your new certificate for the coordination deduction (CHF 25,725) and the fund's coverage ratio (Deckungsgrad), which reflects its overall financial health.
Leveraging Voluntary Pension Buy-Ins#
Any gap up to your maximum buy-in potential can be filled with voluntary contributions, which are 100% tax-deductible from your Swiss taxable income.
Check the cover for disability and death#
Check the new employer’s pension rules for the level of benefits in the event of disability caused by illness or of death for surviving dependants. With some employers a private top-up through pillar 3a is worth it.
Three figures you should compare when changing jobs#
When changing jobs it is not the one large amount that decides, but the interplay of three figures. They all appear on the pension statement and in the regulations of the two funds:
- Vested benefit. The amount that moves with you to the new fund. Check it against the last pension statement – differences usually arise from missing contributions or from an ongoing buy-in.
- Insured salary with the new fund. What is insured is not the gross salary but the coordinated salary after deduction of the coordination offset. With a low workload percentage or a low salary, the insured salary can be considerably smaller than expected.
- Conversion rate of the new fund. It determines the pension that will later arise from the accumulated capital. A move from a fund with a good rate to one with a weaker rate costs more over the years than a one-off salary difference.
Whoever knows these three figures can ask a well-founded question about the overall package in the interview – and recognises whether a salary increase is being eaten up again by poorer pension provision.
Mistakes that cost money: deadlines, account and lump-sum payment#
The transfer is an administrative process with deadlines. Four mistakes regularly cost money:
- Not following up. The transfer must take place within a statutory period. Whoever has no confirmation after two months should enquire with the new fund.
- A gap without a vested benefits account. Between two jobs without a new fund the balance must go into a vested benefits account. A vested benefits account is not a savings account: it may not be drawn on at will.
- Misunderstanding the lump-sum payment. A lump-sum payment is possible only in narrow cases – for instance on definitive emigration abroad or on permanent self-employment. It triggers taxes and is usually the worst option.
- Buy-in without checking. A buy-in to the new fund can make sense but is subject to blocking periods. Whoever draws capital shortly after a buy-in may lose the tax advantage.
Keep every pension statement. In a later pension calculation every contribution gap counts – and it can only be reconstructed with documents.