A bit of a background: I’m an EU foreigner that has worked for a Swiss company for 3 years and no plans to return to work with a Swiss company. Therefore I believe my accumulated “Pillar 1” would be on the freeze until I reach the age of 65.
Currently the funds are with SwissLife accumulating no interest at all, can anyone recommend an alternative?
Do you mean pillar 3?
Forgive my lack of knowledge but it was deducted from my Payslip with acronyms AVS and LPP. I was assuming this is the mandatory state retirement, but I stand to be corrected.
AVS is the first pillar. You cannot do anything about it now.
LPP is the second pillar I guess. Lots of discussions on this forum about it.
You’re talking about the 2nd pillar (pension fund), you can’t do anything about the 1st pillar (AHV/AVS). I would transfer the 2nd pillar to ValuePension and invest it fully in stocks.
I think you can if you don‘t have a swiss passport and your country does not have a „contract“ with Switzerland. Then you might be able to cash out.
Thanks for the guidance, some useful information here let me see what I can find further.
LPP (Pillar 2): You can transfer your vested benefits (LPP) to a different Swiss vested benefits solution, even if you do not live in Switzerland anymore. I would recommend either Valuepension or Viac. Both of these let you invest your benefits in ETF portfolios and have low asset management costs.
If you eventually move outside of the EU/EFTA, you can cash out your benefits. You can also withdraw them to purchase a primary residence, if you become self-employed, and a few other exceptions. Otherwise they are stuck in Switzerland until you reach retirement age (in which case investing them right is crucial).
Important: If your vested benefits are tied up in a permanent life insurance policy - which may be the case if they are with Swiss Life - then the terms and conditions of the policy will apply in addition to the laws governing the LPP. In this case, you will want to carefully review those T&Cs to make sure you do not lose a lot of money by terminating the vested benefits life insurance policy. If they are in a standard vested benefits account, fund, or asset management service, then this won’t be a problem.
AVS (Pillar 1): If you only have an EU passport and reside in the EU, you will not be able to withdraw your AVS benefits. This is only possible for citizens of countries which do not have social security agreements with Switzerland who reside in a country which (likewise) has no social security agreement with Switzerland.
But thanks to the tax-subsidized nature of the AVS, there really is no good reason to want to withdraw. Unless you die young, you will, in all likelihood, get much more out of it in the form of an AVS pension than you ever paid into it.
Hi!
I ended up in this forum when I was searching info about blocked accounts for home ownership according to LPP/BVG.
My husband has worked in Switzerland before and now we live in Finland. We have just bought our first apartment so now he is trying to get his LPP money to Finland. He is an active contributor to Finland’s social security system, so LPP has a lot of requirements for him to be able to execute an early withdraw.
We have gathered all the documents they ask, except for one. They have sent us a form which must be signed by a “responsible person/company” stating that the money will be used for home ownership. Additionally, in the same form, it must be informed the account number of a “blocked account” for the money transfer.
All would be good except for the fact that our bank in Finland, which has granted us the loan, say they don’t know what a blocked account is (?) and there is no such a person who will sign this form. Also, the bank says they will not accept money in another currency than Euro. We managed to contact LPP by phone and they said the form must be signed by the bank, which must provide a blocked account number.
Any clue in how to solve this situation?
Might they be referring to an escrow account to guarantee that the money can only be used to pay for the house and not anything else? If so, maybe a separate escrow agent could set this up.
Hi again. I searched now for what that means and it sounds about right, but then it would be a third party involved, instead of only the bank and LPP.
I feel like the lady from the bank doesn’t have a clue what this is, but there must be a solution from our own bank…
Have you already discussed the details of the money transfer with the seller? That’s where an escrow agent often comes into play. It’s a trusted third party between the buyer and the seller. I’m really no expert in this area, though, I briefly dealt with one once but I didn’t set it up.
We haven’t, no. The seller is represented by a realtor. Thanks for the input. We will try to find out about this.