Hello all
I have not a long time ago left Switzerland and moved to an EU country where I became self-employed. I could withdraw the "over-compulsory"part of my CH 2nd pillar, however I had to park the compulsory part in a Vested Account.
I am considering to close down my self-employment activity and live 100% of passive income / dividends, etc. In such a case in my current country I have no obbligation to keep paying social security and therefore I assume I can also withdraw the rest of my 2nd pillar (compulsory part).
I was however wondering, before I take this decision, what would happen if the rules in my current EU country change in few years, and, as person living 100% of passive income I would have to start paying social security (as for example it is in CH)? would I be required to put the withdrawn 2nd pillar amount back in a CH vested account? is there any clear law on this?
More likely than my concrete case above: what happen if an ex-Swiss resident, moves to a non EU country (example: Andorra) and the person withdraws100% of the 2nd pillar. Suppose that in 2030 Andora joines the EU, would in such a scenario the person be obliged to pay back the 2nd pillar in the Vested Account?
Long story short, do BVG authorithies keep tracking the 2nd pillar pay outs made (for people that permanently left CH) or once the payment is done they don’t care anymore? Does anybody have any concrete experience with these unusual cases?
Thank you in advance.
Best.
No, there’s no reason for them to care about that.
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As a matter of fact, they don’t even care (track you) if you were to return to Switzerland (and become subject to compulsory insurance again - well, maybe don’t chance it by doing it with the same pension fund. Though even then, their legal ground for recourse would probably be shaky to non-existing).
Side note: Out of curiosity, would you be willing to share in which country you’re currently self-employed?
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Thank you for your reply.
Sure, I am in Portugal.
From a Swiss standpoint, self-employment should entitle you to withdraw the full amount (including compulsory benefits). That is generally true even if you live in an EU country.
Not possible if you make yourself self-employed in EU. Rules for self-employment in CH are more strict. I just copied and pasted below what BVG authority say. Not sure if there is any EU country that allows you to be self-employed without paying social security. I don’t believe so.
“… A person taking up self-employment activities in a member state of the EU or EFTA is not entitled to refund of compulsory savings balances if the person is still required to have compulsory pension, disability and survivors’ benefit insurance in the member state concerned.”
Emphasis mine. 
Definitely possible (and to withdraw everything) in some EU countries. Germany, for example, you can withdraw everything, since self-employed don’t fall under compulsory pension insurance. I don’t know any self-employed in Germany that couldn’t.
Kind of surprised if/that Portugal wouldn’t allow it, since the rules seem so lax there that anyone not currently working (and/or seeking work?) isn’t covered - and thus is eligible for a withdrawal.
But then, it really does depend on local
law and it’s definition of compulsory insurance coverage.
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@ BuyAndHold Just out of interest, when you moved from Switzerland to Portugal, did you withdraw the ‘‘over compulsory’’ lump sum before you registered for tax in Portugal (& just paid the Swiss withholding tax) or after you moved and had to pay taxes on the lump sum in both the Switzerland and Portugal?
The reason I ask is because I’ll soon be moving to Spain & I’m curious how others have experienced shifting pillar 2 funds from Switzerland to EU countries and how the local tax authorities deal with this.
@BigVern I did it after I moved.
In my case the canton tax office applied a witholding tax that I could fully recover (at least in my case - the amount was pretty small) if you provide them evidence that you informed your new tax authority (in your case Spain) about the pension payment received. Your new country (Spain) will then tax in full the pension pay-out received. At least this was my experience. Cantons might have different rules. Please also note that the canton that matter in this BVG stuffs is not the one where you live but the one where your BVG insurer / provider is based.
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@ [BuyAndHold] Thanks for the information -I’m planning on shifting my pension lump sum to Schwyz and then transferring the lump sum to Spain in the period before I become tax resident over there, in order to save on Spanish tax.