As an expatriate there comes a time when most of us will move on to pastures new. This guide will explain what you need to do in order to exit Switzerland properly and to make sure you don’t get any unexpected surprises once you have re-located.
The check list is by no means exhaustive but does cover all the major items. We advise that you make multiple copies of the departure document and advise all service providers, pension companies etc. of a forwarding address and a valid email. Keep all documents safe as you will need to refer to them when settling bills that arrive after departure.
There are various options available on what to do with your Swiss pensions. It is highly complex and requires specific advice to ensure that there are no nasty tax demands from your new location. Your financial advisor is able to offer expert advice and solutions to minimise your exit tax and protect the retirement funds from the new tax authority.
Organise insurance for personal goods when in transit if not covered by the removal company.
What happens if I want to keep making my Swiss social security contributions?
If you are either a Swiss citizen or an EU national you can continue to make Pillar 1 contributions but only if you relocate to a non-EU or EFTA country and have previously been registered for 5 uninterrupted years in Switzerland prior to leaving. The amount is set annually - 9.8% of income in 2017 plus an admin fee of 5% of the contributed amount. The minimum contribution is CHF 914 and the maximum CHF 22,850. Keeping this coverage is a good idea if you move to a country with no social security scheme or intend to return to Switzerland in a few years. Contributions made are not offsettable against any social contributions made in your new location.
What happens to my retirement pension (AHV/AVS) after I leave?
If you are already receiving benefits then you can continue to receive them as long as you are either a Swiss citizen, an eligible citizen of an EU state or EFTA state or another country with which Switzerland has a social security agreement with. At time of writing these were Australia, Canada, Chile, Croatia, Philippines, Japan, Macedonia, United States, India, Uruguay and San Marino. A surviving spouse’s pension is paid regardless of the spouse’s nationality.
If you are not receiving retirement benefits then it may be possible to receive a portion of your Swiss pension abroad subject to the social security agreement. If you are not resident in one of these eligible states, a refund of your AHV contributions may be made subject to certain conditions following departure.
Can I keep my Pillar 3?
In short, yes, although it may not be possible to make further contributions and you will not receive any tax relief unless you still have an income in Switzerland. There is also the option to ‘cash out’ subject to providers’ rules and the payment of an exit tax which is normally very small.
What happens to my Pillar 2?
We will fully cover this in a separate article as there are many permutations and advice is specific to each individual’s circumstances, however it is important to seek professional advice as the consequences can be expensive if not correctly handled.
In short, when you leave an employer’s Swiss scheme your pension assets are moved out of that Scheme into ‘Libre Passage’ or, essentially, a cash deposit account with what is generally a separate provider. You no longer accrue the pension benefits or insurances and the cash account pays little to no interest.
If you relocate to an EU or EFTA state then the mandatory piece must remain in a Swiss account until retirement, but the extra mandatory funds can be moved either as a cash lump sum to another pension provider in Switzerland or outside to a different jurisdiction after paying an exit tax. Beware, as your new country may view these funds as income and tax accordingly, hence advice on the best way to do this is key.
If you relocate outside the EU or EFTA then the whole pension may be taken as a cash lump sum. Again, advice on the most tax efficient way to do this should be sought.