It says those will stay in vested benefits account like before.
Reading this thread made me realize I forgot to transfer a 2nd pillar fund myself a couple of years ago. I suppose it is a partly special situation as my position was financed by external funds, so my salary and insurance was covered by a different company than the company I was working for. Later on I received a different contract and got funded by the company I was working for the whole time without physically changing office.
Apparently my 2nd pillar got transferred to a “Auffangeinrichtung”.
No excuses but I want to check what my options are now. I am slightly concerned that notifying my current employer now causes more trouble than not doing anything. Not sure if this happens rarely but maybe somebody was in a similar situation before?
Don’t think it would cause any trouble, it’s probably common for people to genuinely forget about that.
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I don’t think assets coming from an “Auffangeinrichtung” would raise any red light.
Reading people’s answers on the topic of transfering assets on this forum, I don’t even think other assets would either, unless you’ve done buy-ins in the interval in which case, the cleanest and most proper way to handle it is to play clean and ask your pension fund how this can be remediated.
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I read the following on Reddit today:
(…) every year I borrow around 10-15k CHF from a bank and make a voluntary contribution to my BVG. I can deduct both the BVG contributions and the interest paid on the loan from my taxes, so it’s a double win. And then each time I change employer, I transfer my BVG funds to a Freizügigkeitskonto where I can freely invest the funds the same way as 3a funds.
Effectively, I deduct each year around 20-25k CHF from my taxes (instead of just the standard 7k which is allowed on 3a) and all these money I freely invest in stock markets.
Just as an example of what you definitely shouldn’t do. This sounds very much like tax fraud. And quite honestly, anyone who buys more than their purchasing potential allows deserves to be caught. That is exactly the reason why such grey areas will be closed sooner or later.
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I read that as well.
This is just straight up tax fraud.
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Also don’t they need to repay the loan at some point? 
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Hah yeah I read that too and thought to post it here for laughs. https://www.youtube.com/watch?v=UBCORUNqPu8
Not necessarily is it?
- Suppose the person is saving 100k per year, and only takes out 10k loan, 2P contributions are still funded by own savings in my view.
Just because someone has a loan it does not mean they cannot do buy backs. Otherwise anyone who has a mortgage would not be allowed to do it
- If the pension fund statement says the buy back capacity is 1M CHF, and the person has total 100k in Vested Benefit accounts, then no taxes have been dodged
The tax fraud part comes from ommitting the vested benefits amounts and overpaying the voluntary contributions.
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Example:
a) Maximum buy back capacity (show on the individual’s pension fund statement) = 1M
b) Amounts in vested benefit accounts not declared to the pension fund = 100k
If the individual makes a voluntary contribution of 10k there is no tax cheated because the buy back could have been made regardless whether the vested benefits were omitted or not. Therefore no tax fraud
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Let’s say “it depends”. However it doesn’t look like the OP from reddit has clarified own situation regarding this issue.
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On what - can you elaborate? To be clear I am not advocating to do it but so long as the buy in capacity will remain much greater than non declared vested benefits it seems crystal clear there is no tax fraud
Fraud towards other members of the pension fund and its administrators is another discussion
I also understood it that way. However, the poster on Reddit did not go into this part, although he explained everything else in detail. I would therefore assume that he is ignoring exactly that, which would then be tax fraud. But of course: we don’t know the exact situation. In any case, it’s dangerous to post something like that on Reddit without going into this ‘small’ detail (and what I also find interesting is that it deducts both the purchase AND the loan).
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Also weren’t there some court cases about people taking a loan (iirc from a family member) to do a buy in?
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Like you wrote - on the buying capacity, which wasn’t mentioned.
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The purchase amount would be deducted from the income.
The loan would be deducted from the taxable wealth.
The interest on the loan would be deducted from the income.
Maybe the loan is organized in such a way that it doesn’t look like its major purpose is to contribute to the second pillar - as a mortgage increase or margin loan at a broker or something else.
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Imagine a change in life situation / job market / salary and the OP ends up working for a much lower salary than the current one leading to much lower buy-in potential. At that moment, if the undeclared vested benefits are already higher than the max buy in, would that not lead to a legally tricky situation ?
To be fair: This can also happen without vested benefits accounts.
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That part should not be an issue as long as the prior buy-ins were within the legal limit at the time. No further buy-ins would be allowed, of course.
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