2nd Pillar for Non-EU permit B exiting Switzerland

Hi there

My first post here and have already tried to read related posts / materials, so please bear with me.
From what I am reading now, if I exit Switzerland (been here for 5+ years) as a non-EU resident / citizen, I could withdraw everything from my 2nd Pillar. It is also possible to move the 2nd Pillar funds to a vested benefits or similar account. This can be left as-is for a number of years.
Is this correct? I only ask this because I had a friend exit last year and he was advised very clearly that 2nd Pillar had to be withdrawn within 6 months of leaving Switzerland.

Personally, I voluntarily topped up / bought into 2nd Pillar to reduce my tax burden. Hence I would prefer to leave it for 3 years or so, upon exiting Switzerland, and then withdraw after that period to avoid any tax issues.

Grateful for any advice on the above. This “6 month” deadline is what has me stumped, because I do not find that requirement anywhere. Thanks very much in advance!

Isn’t 6 months the typical deadline for moving from your company fund to a Freizügigkeitskonto?


Just to be aware, the country where you are going to might not accept your 2nd pillar as a tax sheltered account, so the advantage would be nil. I would rather look into the possibility to convert it into a local tax sheltered account (if this even exists in your destination country).

I can tell you from own experience it is rather difficult. I have still some money in a kind of 2a account in the Netherlands and it is a headache, despite the 2 pension systems being really similar.

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I checked and Freizügigkeitskonto is what I called a “vested account”. So, I guess the 6 month deadline is only to move from the employer’s pension fund to Freizügigkeitskonto. There is no deadline to withdraw the funds from the Freizügigkeitskonto away from Switzerland.
Thank you!

I know Singapore has a double taxation agreement with Switzerland. Need to check this further!

I also understand you typically have 6 months to move from your pension fund to a new one or a vested account, but can then leave it there as long as you like. If you don’t act, they can transfer it to a standard vested account.

When I read 3rd party sources like tax consultants on the 3-year withdrawal limit, it sounds very vague. So, you might be able to get it out sooner, without losing the previous tax benefits. Maybe contact your local tax office if that’s what you want.

Otherwise, you’d like to compare investment options and tax treatment in SG vs. just leaving it in CH.

Likely, your friend was withdrawing directly from their pension fund upon leaving the country. The six-month deadline applies when you exit a pension fund (even if you are staying in Switzerland).

As I understand it, Singapore is introducing or has introduced a wealth tax, so it is worth checking whether foreign pension benefits qualify for an exemption. Otherwise there is no tax benefit to leaving your benefits here. You will pay the Swiss withholding tax whether you withdraw now or in X years.

If you want to keep money in Switzerland and francs, that may be an argument in favor of a late withdrawal.

The three-year limitation for non-obligatory benefits made up of buy-ins does not apply to leaving Switzerland. It only applies to early withdrawals in Switzerland (to finance a home, for example).

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Wow, that is extremely helpful information. That last bit is new for me.
Yes, the new potential wealth tax is going to be a significant factor. Thank you!

But you will not pay income tax on (compounding) dividends & earnings in the meantime.
And neither will you have to pay capital gains tax.

It all depends on the foreign tax treatment of your vested benefits account.
But there are definitely cases where leaving the benefits in Switzerland is tax-advantageous.

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Do you have a source? Finpension mention that it does apply:

“Blocking period of 3 years for advance and capital withdrawals
Both the advance withdrawals (WEF, self-employment, emigration) and the lump-sum withdrawal on retirement are affected by the blocking period”

In Switzerland, the 2nd Pillar (Occupational Pension Scheme) is indeed designed to provide retirement benefits to individuals. You can choose to withdraw the funds from your 2nd Pillar account. However, withdrawing the funds may have tax implications, and the amount you receive could be subject to taxation. Alternatively, you may be able to transfer the funds to a vested benefits account, also known as a “Freizügigkeitskonto” in German. This option allows you to preserve the tax-deferred status of the funds and potentially defer taxation until retirement or when you withdraw the funds in the future.

There are definitely cases where it is tax-advantageous, but those are few and far between. As a general rule, you should count on paying income tax, capital gains tax, and/or wealth tax in your new country until you can establish beyond doubt that there is an exemption for Swiss vested benefits and/or pillar 3a assets.