Every year, thousands of Swiss people decide to move abroad. There are many reasons for this: love, career, a thirst for adventure or the desire for a self-determined new start. But amongst all the excitement and preparations, one important aspect is often neglected: pensions. We have summarised the key tips on how to best manage your pension fund and plan other elements of your future provisions when emigrating from Switzerland.
France, Germany and the United States are the most attractive destinations for the Swiss. According to the Federal Department of Foreign Affairs (FDFA), there were around 800 000 Swiss living abroad in 2022. However, the adventure of moving abroad should be well thought through. Above all, you cannot afford to overlook your personal pension situation.
Mandatory insurance when emigrating from Switzerland
Before you make a fresh start in a new country, there are a few things to consider. These include reporting requirements, customs formalities, service obligations or tax issues. We will inform you about your social security situation if you wish to leave Switzerland.
Health insurance
As soon as you move away from Switzerland, you are no longer required to have mandatory basic health insurance. One exception is AHV/AVS pensioners, recipients of disability benefits and people drawing an unemployment insurance daily allowance if they move to an EU or EFTA country.
Some Swiss health insurers offer special health insurance for people moving away from Switzerland. This can be a useful option if you want to be sure you still have health insurance that meets your needs. However, people employed abroad must take out health insurance in their country of employment. (This does not include cross-border commuters, who have the right to choose).
The situation is different for retirees: if you draw a pension from Switzerland and live in an EU/EFTA country, you normally remain insured in Switzerland. In some EU countries, however, there is a right of choice, which gives pensioners the option of taking out health insurance in their country of residence.
Accident insurance
If you move abroad temporarily to work for a Swiss company, you will continue to be covered for accident insurance for a maximum of two years, in some countries up to six years. After stopping work in Switzerland, insurance cover for occupational and non-occupational accidents ends after 31 days, unless it is extended up to a maximum of 180 days through a negotiated insurance arrangement. If you emigrate to another country, the requirements in your country of employment or residence apply.
Unemployment insurance
If you emigrate from Switzerland, your entitlement to Swiss unemployment benefits ceases as soon as you leave the country. However, under bilateral agreements with various countries, contribution periods completed in EU/EFTA countries can be taken into account. Benefits can only be exported for a maximum of three months and you must apply for this from your regional employment centre (RAV). However, this is only the case if you are looking for a job abroad.
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Retirement provisions
Switzerland’s 3-pillar system forms the backbone for retirement, disability and survivors’ benefits. It consists of state benefits (1st pillar) for basic subsistence requirements, occupational provisions (2nd pillar) for maintaining your accustomed standard of living in old age and private provisions (3rd pillar) for individual supplementary needs. This structure provides comprehensive protection against life risks and guarantees financial security.
First pillar: retirement, survivors’ and disability insurance (AHV/IV)
People who live and work in Switzerland pay contributions to retirement, survivors’ and disability insurance. This insurance offers financial security in old age and in the event of death or disability.
If you emigrate and work in another country, you will generally receive a partial pension, both from your chosen country and from Switzerland. This means that you are entitled to pension payments from the countries where you have worked. The pension payments are based on the respective contribution periods and regulations.
The situation is different if you emigrate and do not work. In this case, contribution gaps may arise as no further contributions are paid to pension insurance in Switzerland. Such gaps can have a negative impact on the amount of pension benefits you will eventually receive and should therefore be taken into account when planning to emigrate. However, it is possible to continue to pay AHV/AVS contributions on a voluntarily basis. Find out more here: Joining the voluntary OASI/DI (admin.ch).
Social security cover varies depending on the individual situation, nationality and country to where you are emigrating or being posted:
Moving to EU/EFTA countries:
People who move to an EU or EFTA country and work there will be subject to the social security system of their new country of residence.
Voluntary AHV/AVS, disability insurance:
People who do not move to an EU/EFTA country can, under certain conditions, take out voluntary insurance for AHV/AVS and disability insurance (Swiss Compensation Office) in Geneva.
Pension entitlement for retirees:
Pensioners are entitled to a pension if they have paid into the AHV/AVS for at least one year and move to a country with which Switzerland has a social security agreement.
Second pillar: occupational provisions
Occupational provisions are also known as a pension fund. Depending on the destination country and the regulations of your employee benefits institution, second pillar capital is treated differently when emigrating:
Before retirement:
● People who move to a country outside the EU/EFTA can withdraw all of their pension fund assets.
● People living in the EU/EFTA remain insured for the risks of death, disability and old age, with it only possible to pay out the supplementary portion of the pension fund. The remaining capital is transferred to a vested benefits account or custody account and cannot be withdrawn until five years before the reference age at the earliest.
At the time of retirement:
● By law, the earliest you can retire with a pension fund is at the age of 58. However, this may differ depending on the applicable regulations. From this point on, the accumulated savings can either be withdrawn as a lump sum or paid out as a monthly pension, regardless of where the person lives.
After retirement:
● Once the form of payment has been selected (lump sum, pension or a combination of both), this can no longer be changed. It is recommended to contact your pension fund before emigrating to clarify the specific regulations that will apply. For a full payout to be made, you must provide proof that you are no longer a resident of Switzerland.
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Third pillar: private provisions
When you leave Switzerland, you can withdraw your accumulated pillar 3a capital, regardless of which country you move to. It is important that the payment is only made after you have officially deregistered from living in Switzerland and registered in your new country of residence. Withholding tax is payable, which varies from canton to canton.
For people who decide to draw their vested pension capital before emigrating, it should be noted that this amount is taxed separately from other income. This usually leads to a higher tax burden compared to withholding tax.
Strategic considerations regarding pillar 3a when emigrating
It is recommended to carefully review the tax implications of making an early withdrawal and, if necessary, seek tax advice in order to make the best decision for your individual situation. In addition, planning early can help minimise any financial disadvantages and make moving abroad a smoother process. The timing of a potential withdrawal of pillar 3a assets should therefore be carefully considered in order to optimise your tax burden and maximise the financial benefits.
FAQs on emigrating from Switzerland
If you move abroad, you can withdraw your pension fund assets under certain conditions. It is possible to withdraw all of your pension fund assets if you move outside the EU/EFTA, but only the supplementary portion if you are staying within the EU/EFTA.
You must deregister at your local authority, inform all the insurers affected and, if necessary, withdraw your pension fund and pillar 3a savings.
Your AHV/AVS pension will not be directly reduced if you live abroad. Your pension will be paid in accordance with the entitlements you have accrued in Switzerland, which may mean you have not built up a full contribution period of 44 years. This would mean a lower pension paid out from Switzerland.
No, if you move abroad permanently, your mandatory health insurance in Switzerland ends. Exceptions exist for certain categories of people who are moving to the EU/EFTA or for cross-border commuters who have a right to choose. This only applies to individual countries which have a direct border with Switzerland.
Your AHV/AVS pension can be paid out in full if no contribution year has been completed. Otherwise it will be paid out as a monthly pension.
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