2nd pillar is actually an investment bucket where you usually can’t decide much. You have to take the one your Employer gives you. You have the coverage and plan your employer decided and pay as much your employer decided.
In terms of options there is a basic 2nd pillar level that is defined by law and every employer has to offer. But every employer is allowed to offer more than the basics. Here there are big differences and the second pillar coverage should be something to be taken into account before deciding for a new job.
The second pillar is (like the 3a) money you can’t withdraw without meeting some special conditions:
- Retirement
- Building / buying a house to live in (Within CH or near the border)
- Becoming self-employed
- Moving outside the EU/EFTA
A vested 2nd pillar occurs when you have money in the second pillar but you can’t hold it in the second pillar your employer offers. This can happen when:
- You don’t have an employer anymore (and you can’t or don’t want to withdraw the money). This can happen in a number of ways. Example: You change your job but take 2 months’ vacation in-between. Your old employer must transfer your money somewhere. You don’t have a new employer. So the money is transferred to a vested 2nd pillar of your choice. (After you go to the new employer you should move the money to his 2nd pillar but nobody tracks that. So you could “forget” to move the money after two months to the new employers 2nd pillar. This does happen a lot.)
- The second possibility for a vested 2nd pillar is if the second pillar of your new employer should be smaller than the money you bring from your old employer with you. Generally this can happen either when you move from a very generous 2nd pillar to one that offers only the basics or (more seldom) if on your new job you earn a lot less than in your old one (so the corresponding second pillar should be much lower than the one you had). Then your new second pillar can’t “hold” all the money you are bringing with you and some of it has to go to a vested 2nd pillar.
The decisions you generally can make in your second pillar are:
- To add money into it. See here
- To remove money if you meet one of the precondition mentioned above
- Depending on your concrete second pillar you could:
a) have some flexibility about when and with how much money to retire
b) decide who gets the money in cases where you are not married and have a partner
If I understand it correctly @josh is in a quite special position where (a) he has some vested 2nd pillar and (b) can decide which 2nd pillar his employer will choose. This is for most people (especially the second one) quite seldom.
What is interesting as a thought for me is to include the 2nd pillar in your investment strategy. Generally your second pillar is not, ore very little exposed to stock markets (mostly because of the legal framework behind it). If you take this into account you could be exposed with the rest of your portfolio.