What is a vested benefits account?
A vested benefits account is a bank account or insurance policy into which your occupational pension assets are transferred when you leave your employer without joining a new pension fund. This can happen in the following cases:
- Going abroad
- Period of unemployment (not covered by BVG)
- Career or training break
- Transition to self-employment
In short, this account is designed to maintain your pension rights until you resume salaried employment or retire.
How do I open a vested benefits account?
If you leave your job, you are responsible for transferring your assets. You must therefore:
Choose an establishment : a bank or insurance company approved for provident insurance.
Request transfer to your former pension fund.
Follow confirmation of the funds transfer and check that the amount has been credited.
If you do nothing, the assets are transferred after a delay to the Supplementary LPP Foundation, which can delay your procedures and prevent you from pursuing an effective strategy based on your needs.
Types of vested benefit accounts
Your vested benefits can be deposited with either a bank or an insurance company.
Bank vested benefits account
Banks offer vested benefits accounts that function either as a savings accountor invested in investment funds. With the first option, your capital is safe, but you can't expect much return because of the low interest rate. The second option offers a higher-yield alternative on the long term.
There are no benefits in the event of death or disability. In other words, your capital lies dormant, protected, but without any additional guarantees. If you wish to replicate the protection of the 2nd pillar, we strongly advise you to take out risk insurance, either separately or via a vested benefits policy.
Insurance vested benefits account or policy
Choosing a vested benefits account or policy with an insurance company offers clear advantages. In addition to savings, these solutions include risk coverage: in case of work incapacity or death, benefits are paid to the insured or their relatives. This not only helps to preserve the accumulated capital but also provides a financial safety net, which is often overlooked.
In insurance, you can take out either a vested benefits account (similar to a bank vested benefits account) or a vested benefits policy.
How are withdrawals taxed?
When you withdraw assets from your vested benefits account or policy—whether at retirement, for the purchase of a primary residence, upon permanent departure from Switzerland, or in another permitted situation—you are taxed at a reduced rate equal to one-fifth of your regular tax rate, separately from your other income. This taxation method is called separate taxation at a preferential rate.
It should be noted that the applicable taxation depends on the tax residence at the time of withdrawal. Each canton sets its own tax scale, often progressive, based on the amount withdrawn. The higher the amount, the higher the marginal rate, but it remains significantly lower than the ordinary income tax rate.
Possible optimizations
To reduce your tax bill, it's sometimes a good idea to:
- allocate assets to two accounts (in two different institutions),
- spread withdrawals over two fiscal years in a row,
- or change the place of residence (e.g. before retirement).
How can I recover my pension assets?
The recovery of pension assets is strictly regulated by law. However, in certain specific cases, a formal request may be made, accompanied by appropriate supporting documentation.
1. Withdrawal at retirement age
You can collect your assets:
- At legal retirement age (65 for men, 64 for women until 2028)
- Early, up to 5 years before the reference age,
- Or deferred, up to 5 years later, if you are still gainfully employed.
2. Definitive departure from Switzerland
If you are leaving Switzerland permanently, you can request payment of your assets, subject to the following rules:
- Non-EU/EFTA destination: You can withdraw your entire pension assets (compulsory BVG portion + supplementary portion).
- Destination within the EU/EFTA: Withdrawal is possible for the extra-mandatory portion. The compulsory portion (BVG) remains blocked in a vested benefits account, unless you are no longer affiliated to a compulsory social insurance scheme in the host country.
3. Home ownership
In accordance with the Ordinance on the Encouragement of Home Ownership (OEPL), you can make use of your assets:
- Topurchase or construct a main housing,
- To acquire an existing mortgage ,
- To acquire cooperative shares for a main housing.
4. Transition to self-employment
If you start working as a self-employed person on a full-time basis, you can request the full withdrawal of your pension assets, provided you do so within one year following the start of your activity.
5. In the event of disability or death
In the event of total disability recognized by the IV, if no pension rights are granted by the pension fund, you can receive a lump-sum payment. In case of death, the assets are transferred to the legal beneficiaries according to the order specified by the BVG.
French 
English