Moving abroad? What happens to your pension fund?

Emigrating to a non-EU/EFTA country: Your pension assets

Moving abroad is a major step that requires careful financial planning. If your new home is outside the European Union (EU) or the EFTA states, you can have your entire accumulated pension fund capital paid out. Unlike moving to an EU/EFTA country, where often only the non-mandatory portion can be withdrawn, the full amount is available to you. This provides financial flexibility for your new start.

The cash payout process: A step-by-step guide

At Tellco, we want to make the process as straightforward as possible for you.

The three-step process

1. Submit application: Complete the “Application for cash payment / transfer” form, available in our Download Center.
2. Compile documents: Gather all the required documents. You will find a detailed list below.
3. Send your application: Mail the complete set of documents to us. Following a successful review, we will transfer your assets.

Required documents

• The fully completed and signed application form (no. 6054)
• A notarised signature from your spouse or registered partner (if applicable)
• A copy of a valid form of identification (passport or ID card)
• Confirmation of de-registration from your Swiss municipality of residence
• The exact details of the bank account for the transfer

Withholding tax: What you need to know

When you receive a lump-sum payment, a withholding tax is levied and deducted directly from your pension assets.

A numerical example of withholding tax

Imagine your accumulated pension assets amount to CHF 200,000. As Tellco pk is domiciled in the canton of Schwyz, you benefit from one of the lowest tax rates in Switzerland. For a lump-sum withdrawal of this size, the withholding tax could be approximately CHF 10,200. Your net payout would therefore be CHF 189,800.

You can find detailed information on this topic in our factsheet “Withholding tax on pension benefits” in the Download Center. Depending on the double taxation agreement between Switzerland and your new country of residence, you may be able to reclaim the withholding tax you have paid.

Long-term consequences of a lump-sum payment

A cash payout offers financial freedom, but it also comes with greater responsibility. Consider the long-term consequences:

• Loss of pension cover: The lump-sum payment terminates your entitlement to lifelong pension benefits from the pension fund. Insurance cover for your dependants in the event of disability or death also ceases.
• Personal responsibility: After the payout, you are solely responsible for investing and managing your capital. You will have to handle matters such as investment risk, inflation and securing your standard of living in retirement.
• Taxes in your destination country: You should clarify if and how your new country of residence will tax the capital you have withdrawn or any income generated from it.

Cash payout vs. a vested benefits account: Which is right for you?

Instead of an immediate payout, you can transfer your assets to a vested benefits account with Tellco. Here is a comparison to help you decide:

Cash payout

• Advantage: Immediate financial flexibility for your new start abroad (e.g. for buying property or starting a business).
• Disadvantage: Complete loss of pension cover and full personal responsibility for managing the funds.

Vested benefits account

• Advantage: Your pension capital remains securely invested in Switzerland, continues to earn interest and retains its status as a pension asset. You can withdraw it at a later date.
• Disadvantage: The money is not immediately available and remains subject to the legal provisions for occupational pensions.

Do you have any further questions about emigrating and your pension fund assets? Good planning is crucial. Our team is here to help and support you with your next steps.

Contact us for a personal consultation