How to make the best out of my pension fund?

In my opinion, the interest you earn is good, considering that this is the fixed income/bond portion of your portfolio. But I’ll assume that you have a higher risk-tolerance and want to give more weight to components with the potential for higher returns.

There is, of course, the option of moving outside of EFTA/EU and withdrawing your pension fund benefits at some point. From what I understand, the UK does not levy taxes on Swiss pension benefits, and the Swiss/UK DTA lets you reclaim the Swiss withholding tax. But I would need to check that in more detail.

With regards to withdrawing your benefits to buy a property: The main requirement is that the property is your primary residence at the time that you make the withdrawal. After that, you are allowed to rent out the property during intervals. You can also rent out rooms or even the entire home short-term without restrictions (unless the municipality or the condominium has special rules about short-term rentals).

If you sell the property, the money you withdrew from your pension fund must either be repaid to the pension fund or used to buy another primary residence. So even this arrangement leaves room for capital gains.

You should be sure to look into the capital withdrawal tax in your canton. This is the tax you pay on money withdrawn from a pension fund, and it is quite high in some cantons.

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For the example of moving to UK I am not aware that it is possible to reclaim the Swiss withholding tax

If the pension fund is domiciled in Schywz the withholding tax payable would be quite low, maximum 4.8%
Finpension article about withdrawing pension moving abroad

Oh o.k. smart !

So each time you sell if you use the capital to buy another primary residence then you don’t have to pay it back … so basically you can use it as a saving account, put the money back in the pension whenever you rent a flat and use it whenever you leave in your own purcahsed flat. That’s smart !

It would then make sens to buy a small appartment building, live in the one in the last floor and rent the two-3 other flats !

I could do that in “La chaux-de-Fonds” for exemple where you can buy an appartment building for less than 1 million…

Well, there is already a way to do this now. It is called pillar 1e, where people can choose their own investment strategy. Pillar 1e can be used for amounts exceeding 1.5x the coordinated salary of the 2nd pillar (so from ~130-860k). Additionally, the employer must offer / allow these pensions plans, otherwise its not possible. Here is a link to an article from poorswiss.

Interesting, but again what do you do when the market crashes and you change company, and the new company doesn’t offer such pillar 1e? You would just realise your losses…


I do have a Pillar 1e, but it is very crappy with max 40% equity exposure and forced investment into CH real estate.

In case of change in employment status, I’d just stick it into a vested benefits account. A realised loss is not much different from an unrealised one.


Are there any constraints to be able to do this, for example that you are leaving Switzerland permanently? What happens if you withdraw the money but then later move back to Switzerland? And does this hold only for non-Swiss citizens or also Swiss?

If this is possible, that is / would be great. I stumbled upon this recent parlimentary motion discussing this topic.

As I understand it, currently you would have to bear (realise) the losses of the 1e plan when switching to a new employer (without an 1e plan or from another provider)?


I mis-typed. I was thinking of loss of employment. When you have a new employer you should transfer to the new pension fund. Though I know some people do not make the transfer.

I would not move to an employer who doesn’t offer a 1e solution.

Sure, so say I have a 1e with value 200k and then it loses value to 100k. I have 100k in the 1e. If I move to a new employer and put it in the new PF, I still have 100k in the new 1e, so what’s the issue with realising the loss?


I was thinking about the scenario of moving to a new employer without 1e. If the job change happens during a market slump, it would be not ideal for your pf assets (1e part).
But if a new employer also offers 1e, thats good. Only problems that could arise could be if offered investment strategies are different. Example switching from 80% stocks to 40% stocks.
Losses are fine if you anticipate following the same investment strategy in the long term for your 1e. Or at least thats my thinking.

Yes, I see your point. I would avoid that by ensuring the new employer has a decent 1e offering and if no new employer leave it in something like VIAC/Finpension vested benefits account.

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The rule is that if you sell the property, but plan to buy a new primary residence in the future, you can place the money in a vested benefits account for up to 2 years. Within those two years you can withdraw it from the vested benefits account to buy a new primary residence. If I’m not wrong, this transaction does not generate capital withdrawal taxes, but I would have to double-check that.

So your idea of flipping properties and always reinvesting your pension fund benefits in your new primary residence should theoretically be possible, but there may be court rulings aimed at preventing that. You would have to check into it.

In any case, you can only make new early withdrawals from your pension fund for real estate every 5 years, and the minimum withdrawal is 20,000 francs.

I wrote a basic guide on the subject of early withdrawals for property financing which you can find here:


Withdrawing pension when moving abroad has been discussed a few times. I would suggest to keep discussion in this thread

Appreciate that ! Thanks for the usefull link (thanks to all of you that shared all this link, it did not knew the 1e existed before !)

Intersting I didn’t knew the 1e existed. Unfortunately you must make at least 130k a year to qualify which isn’t the case for me.

I think the withdrawal into real estate would be the best option, that is if I make great deals.

Or if someone want to hire me in a position that would qualify for the 1e …

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Axa with another astonishing 1% return in 2023. Meanwhile:

  • Vanguard FTSE All-World UCITS ETF +10,75%

  • iShares Core SPI +5,29%

  • iShares Swiss Domestic Government Bond 1-3 +0,79%

  • iShares Swiss Domestic Government Bond 3-7 +3,92%

  • iShares Swiss Domestic Government Bond 7-15 (CH) +10,52%

  • iShares Core CHF Corporate Bond (CH) +5,67%

(All returns in CHF)

Not sure what happened in the real estate market, but given that rents and property values are at ATH and funds like Credit Suisse Real Estate Fund were at least flat in 2023, we can expect a positive return there as well. How to all these asset classes do well, but my PK gives out 1%? For reference, my 3a is up 11.4% in 2023.

So either all their money is tied up in the shortest of bonds, they lost on some speculative investmenr or real estate gamble, or - most likely - us young people are losing out on returns because the PKs are cross-subsidizing the 6.8% withdrawal rate current retirees are enjoying, plus of course transaction costs and bonuses for the chefetage eating into the returns.

If this continues, today’s younger generation is headed straight for poverty and relying on EL in the future.

That depends on the health of your PK, Deckungsgrad, how many retired vs. active employees, etc.
Also keep in mind, if the markets tank by 20%, your pension fund still needs to pay out at least 1%, so they have to build sufficient reserves for that.

Unlikely, the pension fund investments are highly regulated and rather conservative.

What boni are you talking about?

As a side note, my pension fund paid 4.5% for 2023 and on average around 4% in the last 10 years, pretty good for an almost risk-free investment.

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And that is the entire point of my rant. The whole point of the PK is that it’s “my money”. But I am required by law and my employer to throw money into a black box that gets random results because of factors I have no control over. Why can’t I choose the PK myself? Why isn’t there a 401k equivalent where I choose a handful of passive ETFs and forget about it? This is the same faux competition that health insurances are in, just that in this case the customer has absolutely nothing to say in the matter instead of a little.

Sorry for the cringe source:

There’s an entire book about the issues with the PK system. The average TER of PKs is 0.5% p.a. which is quite insane in today’s fund universe. Can’t tell me these fund managers and managers aren’t paid well, given that they can hand out endless lucrative jobs for members of parliament.

It’s regulated in all the wrong ways. Too much active management, too much real estate, too much domestic, too little in stocks. But instead of addressing these issues, the PKs lobbied the parliament into lowering the mandatory returns to 1%.


The only action you have then is to minimize your own contributions and do with that delta what you want (giving up the tax break).


Or extract it out of the pension fund e.g. use it to pay off the mortgage.

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“In this world, nothing is certain except death, taxes and redistribution of wealth via AVS and 2 Pillar”

Quoted word for word from Benjamin Franklin :wink: