I’ve seen multiple thread on this forum about whether or not it is possible, when switching jobs, to keep one’s money in a Vested Benefits account like VIAC/Finpension rather than transferring it to the pension fund of the new employer. The conclusion generally seemed to be that it’s not really allowed but also not really enforced.
What happens if I conceal vested benefits assets from the new pension fund? The new pension fund cannot know whether and how many vested benefits accounts you have. Although you are obliged by law to transfer all vested benefits to the new employer’s pension fund (up to the maximum regulatory benefits), no one can check whether you are actually doing so.
I’m actually very surprised that they are able to publicly make such a statement. They mention some of the downsides (e.g., potentially reduced invalidity benefits), but these seem pretty negligible. Does the jurisprudence really have no precedent for any other form of financial penalties for not transferring assets? If the law is not enforced to the point that large financial institutions can advise their clients not to follow it, it seems like it’s not really a law?
When you sign a new job contract, typically new employer will send you a letter to transfer all vested benefits to the new fund. If you tell them that you have transferred everything but you did not then there is no way for them to know.
Going further, if you want to make voluntary contributions, you again have to sign a paper declaring the value of your VB benefits, most likely you can again say ZERO and there is no way for them to check. The other issue is that in general there is a rule to not allow employees to be over insured. That is for 2nd pillars to control. But if they do not have all the information, their control is also not correct.
Most likely it would be wise to not make voluntary contributions.
I think in Switzerland, lot of things are driven by what is expected from an individual. It comes down to individual risk tolerance, comfort level in living with potential issues that might occur if the new employer holds it against you, etc.
Same here, they completely lost the moral compas. You never know if finma one day just closes the shop for them constantly ignoring laws and regulations.
I remember (no guarantee if correctly) few cases related to that law I read about when I searched for it. But none of them in the line of “but it’s the law”.
1 guy went against the tax office, because they wouldn’t accept his full buy-in while keeping his VB account. He eventually lost (not in the first round, though), i.e. he couldn’t deduct the full buy-in
The others were in connection with receiving welfare, and something with divorce and cashingout. Don’t remember the outcome
In my amateur understanding, the law is meant to prevent cases like the first, as they have negative tax consequences.
If you declare any vested benefits when doing buy-ins, I guess you are still acting in the spirit of this article.
Also, note the same law mentions the possibility to not transfer, respectively to transfer in and partly out again based on the regulation of the fund.
What I’m wondering: If I forget to transfer the VB account to the pension fund, can I do it later at any time without any consequences? Or can pension funds only do this when I join?
I don’t agree that “there is no way for them to check”. If you apply to a job with 10 years of experience in Switzerland, and don’t transfer any assets, then they know by definition that you’re not disclosing everything. So it seems to me that there are ways for them to know, but the question is whether there are ways for them to enforce it
I’d be interested to read the details of the cases, if you know how we can find them. Because there’s also the option of transferring only part of the assets (eg, only the mandatory part, not the super-mandatory), which could also affect the penalties I assume.
I understand why the law would want to prevent people from not transferring the mandatory part, since it’s supposed to also be used as insurance benefit for eg invalidity, but unless I misunderstand something, nobody is really getting hurt if the super-mandatory assets are not transferred?
Some employers have their own pension finds, but in most cases they delegate that service to another foundation. So I expect the employer would then not care so much, since the foundation pools across multiple companies?
Usually these foundations are technically non-profit but associated with a for-profit financial institution, so of course they have an incentive to get as much of your money as possible. Hence I doubt they would be transparent in answering either
I just searched for Art. 4 Abs. 2bis FZG to see what pops up in online search. There might well be other cases or commentary on it that’s not publicly available.
My point was, the cases I found were not about transferring or not, but about different issues.
Employer ≠ employer’s pension fund.
Pension or withdrawals are based on your capital, but invalidity or widow pensions are based on income. In those cases, I understand the pension fund may well expect to use non-mandatory capital for that, as well.
Not sure whether they would be obliged to accept the “hidden” vested benefits in such a case and could thus deny the full coverage.
So eventually, the damage could be on you. Same if you decide ot get rid of the VB later, for example to get a higher pension.
If I am not mistaken, for me it is ca. 29% of the total meaning I’d keep 71% in a VB account with better investment opportunities, but I would not be breaking the law. And the more you pay in and the higher your salary becomes, the more this % should go down.
I did also not transfer the pension fund money to the new employer - did that two times as of today, and will continue this practice.
It is a decision between higher returns or havin an „insurance“ (but the „insurance“ does not pay out in case you die and your are not married. Vested benefits are at least part of your assets, even when you die).
Is the law really that only the BVG part needs to be transferred? If yes, that’s definitely solving the problem, because for me the BVG part is an even smaller ratio than 30%. But I couldn’t find any official statement indicating that only the BVG part needs to be transferred
In both cases I send the QR-Code to the pension funds of my old employer and told them to transfer the assets to a vestes benefit account. In case they ask, I probably would habe told them, that I will start a job later in the year - but no one asked, in both cases. We are talking about stock exchange listed companies.
Finpension offers two vested benefits. So in case I HAVE TO send money, I will take the account with the lower value.
Regarding morality of Finpension, as someone mentioned above: I like to know my options, does not matter if they are in white, grey or black zone.
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