Cross-border commuters: what happens to your Swiss 2nd pillar

Cross-border commuters contribute like everyone else

As soon as your annual salary with the same employer exceeds the entry threshold (currently CHF 22,680), you are insured with your Swiss employer’s pension fund. You save for your retirement and are covered in the event of disability and death, just like a resident.

Your pension certificate, sent to you every year, shows your assets and their mandatory part. Keep these certificates: they are the best record of your assets.

You change employer in Switzerland

Nothing special: your termination benefit is transferred to your new employer’s pension fund. Between jobs, it goes into a vested benefits account or policy in Switzerland, which you choose. Without instructions, it goes to the Substitute Occupational Benefit Institution after six months to two years.

You will find all the details in our guide Changing jobs or unemployed: what happens to your 2nd pillar?

You stop working in Switzerland

For a cross-border commuter, ending work in Switzerland is treated as leaving Switzerland: you can request a cash payment of your termination benefit, with the same restrictions as for a move to the EU or EFTA.

• Extra-mandatory part: it can be paid out in cash.
• Mandatory part: if you are subject to compulsory old-age insurance in your country of residence, for example because you now work there, it stays in Switzerland in a vested benefits account or policy and can be paid out to you no earlier than five years before the AHV reference age.
• If you are not subject to this compulsory insurance, the full amount can be paid out.

The LOB Guarantee Fund has your situation checked by the competent body in your country. For France, you fill in the first part of the form and the health insurance fund, in particular the CPAM, fills in the second part, no earlier than 90 days after your work in Switzerland ends. For Germany, the examination takes place no earlier than three months afterwards (LOB Guarantee Fund).

Buying your home with your 2nd pillar

Early withdrawal for home ownership is possible for your main residence, even if it is in your country of residence. Second homes and rental properties are not eligible. This withdrawal is not affected by the European restriction described above.

The minimum amount is CHF 20,000 and a withdrawal is only possible every five years. After the age of 50, the amount is limited. If you are married or in a registered partnership, the written consent of your spouse or partner is required.

Tax on the capital

Capital paid to someone who does not live in Switzerland is subject to withholding tax, levied in the canton where your pension fund or vested benefits institution is based.

Depending on the double taxation agreement between Switzerland and your country, and on whether your fund is governed by private or public law, this tax may be refunded to you if the capital is taxed in your country of residence. The rules differ from one country to another: check with the tax administration of the canton concerned or with a tax adviser before requesting the payment.

Forgotten assets in Switzerland?

Cross-border commuters often change employer and receive their post abroad: the risk of losing track of an account is real. The Central Office 2nd Pillar search is open to everyone, whatever your country of residence, using your Swiss AHV number.