Finpension (2nd/3rd pillar investing)

[FuriousP]

Ok but it needs to be come from two separate vested benefits in the first place. So It would not work if you split after you leave your job.

[biker369]

@Cortana

Obligatory transfer is only about the mandatory part. 7% / 10% / 15% / 18% of your insured salary up until 61k (86k - 25k Koordinationsabzug). So let’s assume someone starts working with 25 and switches the employee 5 years later. He had an avg. salary of 125k and an insured salary of 100k (-25k Koordinationsabzug). As his pension fund was pretty good, the deductions were 5%/10% instead of the required minimum of 3.5%/3.5%.

5 years x 7% x 61k = 21.5k mandatory BVG.
5 years x 15% x 100k = 75k total.

At least 21.5k need to be transferred to your next pension fund, the rest is extra mandatory and you are free to transfer that to a vested benefits account.

I started working when I was 25 and I am now almost 40. My salary has been always above 61K (currently 140K) . So, the maximum regulatory benefits for me would 9 (years until 34)* 7%*61K+6(years after 34)*10%*61K=75K. In my current pension fund of my employer, there is almost 240K. Does it mean that I can invest the 240-75=165K in vested benefits accounts when I change the employer at the end of the year?

[San_Francisco]

@biker369

Does it mean that I can invest the 240-75=165K in vested benefits accounts when I change the employer at the end of the year?

That’s more or less what he meant and suggested - but not what the law allows (he’s wrong about that).
You’re not allowed to deliberately split between your new pension fund and a vested benefits account.

[biker369]

Doesn’t this post from Finpesion suggest the same thing as Cortana does?

@https://finpension.ch/en/vested-benefits/faq/new-job/

Do I have to put the money back into the pension fund when I start a new job?
Yes, in principle you must transfer all vested benefits back to the pension fund if you have a new employer and are insured with the pension fund. However, you are only obliged to contribute up to the maximum regulatory benefits.

[San_Francisco]

@Patron

But the question was not regarding conformity with the regulations. (…) He is right that it’s possible to do it and you’re right that the law does not permit it.

The statement “Obligatory transfer is only about the mandatory part. 7% / 10% / 15% / 18% of your insured salary” is very much about conforming with law and regulations. What he was saying is that you could legally transfer only (the mandatory) part of your pension fund benefits to the new pension fund. That is, to my knowledge and the sources provided, not true.

Is is technically possible to violate the law? Sure, just as you can evade taxes. You may even get away with it.

@biker369

Doesn’t this post from Finpesion suggest the same thing as Cortana does?

Again, no. Non-mandatory pension benefits are (usually) part of the maximum benefits according to the pension fund’s regulations.

Now, pension funds ususally do set a certain limit for maximum benefits (progressing with age), which will be a “cap” on maximum you can transfer from your old pension fund and/or pay in voluntarily. And, yes, someone can surpass this maximum with his portable benefits from his old employer’s pension fund. Maybe even you. You may have to transfer to vested benefits account then.

But the maximum amount of benefits according your pension fund’s regulation is not to be confused with the BVG maximum.

Furthermore, your new pension fund’s regulations don’t have to limit yearly savings contributions to the minimums set by the BVG law. They can be higher than 7%/10%/15%/18 or cover a higher salary.

[San_Francisco]

PS: See this example from Profond (for a person born in 1965, but gets the points across):

https://www.profond.ch/sites/default/files/2021-12/Art.%2043_Einkauf_1.1.2022_Berechnungsbeispiel.pdf

• Sparskala exceeds legal minimum percentages
• …and applies to salary of 120’000/year (again exceeding legal minimum)

The maximum amount benefits for the 40-year old in 2005 would have been 201’646 CHF according to pension fund regulations. Sure, it may only be an example - but the amount is much higher than the maximum amount according to BVG (the same 1965-born person would be age 56 in 2021, and in 2005 have had a maximum of BVG benefits of 77909 CHF).

TL;DR: You are required to transfer pension benefits to your new pension fund up to the maximum provided by its regulations and insurance plan. The fund’s maximum amount will usually (far) exceed the maximum of “obligatory@ benefits according to BVG law.