Based on my previous experience, your current employer might ask you for information of your new 2nd pillar account.
If you currently don’t have any, your account might be converted to a vested benefit account. After your new employer gives you the information of your new 2nd pillar account, you can transfer the funds from the vested benefits to the newly created account (my experience).
You can generally have your current pension fund transfer your benefits directly to your new pension fund. Your employer may take care of this for you, but I recommend contacting your pension fund directly to make sure (there are cases where benefits are not transferred correctly).
Some pension funds make the transfer request forms available on their websites.
A vested benefits account is only necessary if you do not immediately join a new pension fund (i.e. if you become unemployed or self-employed, leave Switzerland, etc).
I’ll be finishing soon the PhD and I will take a month off. I was thinking of moving my pension fund to a vested account and let it there (~20k). Apparently, the law in Switzerland is not very clear and you are not forced to transfer your pension fund to the next one when employed again; this is a gray zone area, but could be worth it with the nice interest over years. What do you think?
The law seems fairly clear to me. FZG, Art. 4 says that the insured person notifies the vested benefit foundation of the entry in a new pension fund and the insured person also notifies the new pension fund of the vested benefit account. The vested benefit foundation is then required to transfer the assets. Art. 11 says that the insured person has to allow the pension fund access to the previous pension fund’s statement and the pension fund can claim these assets.
Whether anyone would ever find out if you don’t follow the law is another question but I wouldn’t recommend it.
I just talked with a financial planer about this yesterday. Pension funds can’t force you to transfer your previous pension fund assets to them. Even if they find out that you left everything at Viac/ValuePension, they can’t do anything about it. There are no penalties too.
So in theory you could always transfer your 2nd pillar money to Viac/ValuePension when switching jobs and invest it there with a much higher yield than pension funds are getting with their low stock allocation.
But: Pay attention to taxes. If you end up with more than 2nd pillar accounts (you can transfer your pension fund to 2 seperate 2nd pillar accounts when retiring) the tax office will see this as tax avoidance and might tax it as income (26-30% instead of 3-8%) once you withdraw it.
And do not even think about paying into your pension fund to close any “gaps” while having a 2nd pillar account at Viac/ValuePension. This isn’t tax avoidance anymore, this will be considered tax fraud.
Isn’t this a contradiction of FZG, Art. 11? “Die Vorsorgeeinrichtung kann die Austrittsleistung aus dem früheren Vorsorgeverhältnis sowie das Vorsorgekapital aus einer Form der Vorsorgeschutzerhaltung für Rechnung der Versicherten einfordern.” And I also don’t see Viac etc. to have a choice according to law “Treten die Versicherten in eine neue Vorsorgeeinrichtung ein, so müssen die Freizügigkeitseinrichtungen das Vorsorgekapital für die Erhaltung des Vorsorgeschutzes der neuen Vorsorgeeinrichtung überweisen.”
It may indeed be true that there are no penalties if you hide your assets, though, besides the potential tax penalties you mentioned.
Thank you for your answers! The idea came also from a financial planner I talked to one year ago, and he gave me the example with Swatch that it worked easily. I was not aware that you might end up paying way more taxes if you are “caught” when you withdraw it. I don’t think it’s worth.
Also, as @Dr.PI said, how can you lie/hide it if you were working in a “normal” company Switzerland before this new job? (normal meaning you were hired with a standard contract).
Interesting topic. I’m having a similar situation by the end of the year. I read once a comment of someone that split the 2nd pillar, this person transferred a part to the new pension fund and kept a part with finpension/viac. Cant remember why this was done.
Guys, thanks a lot for the feedback and comments. I do understand that this is a better way to do it but on VIAC website itself they say, " The most important thing first: Upon taking up a new job, you must transfer your vested benefits assets into the new pension fund."
So essentially, if someone find that you have multiple 2nd pillar account it might be a trouble isnt it ?
Can you migrate your 2nd pillar under viac vested benefit accounts while switching job for 10+ years and while approaching retirements with the last job asking them to take on your vested benefits?
At the time of retirement, you will end up with only the last 2nd Pillar and avoid the extra taxes ?
Also will you be better off accumulating your retirement on a vested benefit account with ETF having a return of 5-7% for 10+ years and pay 30% tax on it or having a return of 1-2% with only 6-8% tax on it ?