Invest pillar 2 in ETFs by moving it into a Freizügigkeitsdepot?

1

I recently had a closer look at my pillar 2 statements, and it doesn’t look like a great investment.

  • 17% (!) of what I and my employer pay disappears in the form of “Risiko-, Kosten- und gesetzliche Beiträge”
  • The management fee is 2.3 % (a year ago this fee was listed explicity, now it’s just hidden in the 17% above)
  • it seems impossible for me to understand the yearly statement: it doesn’t say what kind of plan my company chose, and I cannot figure out how they calculate the projected capital growth
  • quick googling says CH pension funds paid somewhere between 0-3% interest in the previous years
  • From this finpension article I learn that there is a redistribution from workforce to pensioners
  • being single without kids, I don’t need the insurance benefit in the event of death
  • maybe I want the insurance benefit in the event of disability

So I was thinking about investing the pillar 2 into ETFs, like pillar 3a. I’m confused about the legal situation. E.g. this VZ article suggests that it is not unheard of to “forget” to transfer previous pillar 2 money to the new employer’s pension fund.

So I could transfer my current pillar 2 money into e.g. a finpension Freizügigkeitsdepot, which would allow me to chose a 100% individual strategy, at 0.49 % admin fees.

After writing all this, I saw this post from @Your_Full_Name from 2021, which exactly confirms the idea:

So that’s interesting. Has anyone done this? What’s the sitation in 2025? Other thoughts or ideas?

2

You cannot move 2nd pillar money in Vested benefit accounts while you are employed

If you leave your employer then you can move to VB account. But once you get employed again, you will be asked to move money to the new fund. There are even regulations proposed to ensure this happens.

Everything else is a loophole and you cannot plan with it.

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3

yes, I was thinking either if/when I ever change jobs, or if I decide to retire early at 58, or even do a dummy quit/rehire with the current employer just to split it out into 2 VB accounts :sweat_smile: (not seriously, just thinking)

4

I believe what should definitely be legal is to split the mandatory and non-mandatory capital into 2 accounts and only transfer the mandatory part to the new pension fund?

5

Rather than doing all these gimmicks , you might be better off moving to a low lumpsum tax canton for few years before retirement

How many is enough for not irking tax office?
I don’t know

6

Should be -: maybe
Is it ? - no

7

definitely something to keep on the radar

8

is it not? how do you know this? (genuinely interested, i find it rather difficult to find good information on this topic)

9

The only law I know about is that new employer asks you to move all your VB money to the new fund. It includes everything

Sometimes people „forget“ to declare and that’s what you read on forums as a potential strategy to reduce lump sum taxation by splitting 2nd pillar assets and forgetting to inform new employer

10

i thought the taxation only happens at retirement, not when switching jobs/pension funds.

11

Ok, i guess it’s a loophole. Was wondering how common it is abused, or how agressively prosecuted.

12

There is no tax when moving funds from old employer to VB or from VB to new employer

I mean if you don’t move all your funds then you basically end up with two funds. VB and new employer.

When you withdraw, you can withdraw these in two different years which leads to low effective tax

This is why some people „forget“ to declare during move to new employer

13

I heard that it’s something common enough for govt to bring regulations to close this loophole. It’s in progress

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14

good to know

15

didn’t know you can withdraw VB accounts in different years like 3a. also good to know.

16

Have you already spoken to your boss? Bosses of smaller SMEs are often unaware of this and are therefore just as affected. I have already heard of companies that then switched to a better pension fund (it took a while, of course). For example to Profond, which had 8% interest for 2024.

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17

Profond customer service is great, and they’re pretty interesting in what they offer to employers as far as plan flexibility is concerned. Second talking to your boss / the owner of the SME about it, or perhaps the HR dept. if bigger firm.

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18

If you are self-employed, you can even withdraw pillar 2 in three tranches.

A friend of mine did this. Basically, you do two partial retirements (e.g. going from 100% to 60%, and then from 60% to 40%, in different years after turning 60) and you opt to get the lump sum for each partial retirement (as well as for the final full retirement at any year afterwards).

Regarding the two VB accounts: apart from the “forgetting” one VB account strategy, you can also stop working before the official retirement age, or reduce your workload such that you make less than the Koordinationsabzug (about 22-23k), move your pillar 2 into two VB accounts (and withdraw those in two different years). Completely legal.

Edit: I believe you can also do the Teilpensionierung thing if you are employed, if you can convince your employer to do the Teilpensionierungen until full retirement in three tranches.

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