Leaving Switzerland: what to do with your 2nd pillar on the way home.

You worked in Switzerland, you are leaving (or have left) the country. Good news: your 2nd pillar is waiting for you. Less good news: there are three options to access it, each with its own taxation, and the EU/EFTA rule complicates things. Here is how to decide, and in what order to do things.

First: understand the mandatory / extra-mandatory split

On your pension certificate (the annual document from your last Swiss fund), your assets are split in two:

• Mandatory assets = the part required by LPP law, on the coordinated salary up to about CHF 64,000/year. Locked in Switzerland until retirement.
• Extra-mandatory assets = what the fund offers on top (beyond the legal minimum). Payable in cash on departure to the EU/EFTA.

If the breakdown does not appear explicitly, ask your fund — it is a legal right (details in our guide).

Option 1 — Cash withdrawal (the possible part)

Swiss tax side

At the moment of payment, the foundation withholds a source tax. The rate depends on the foundation's canton of domicile, not the taxpayer's. Orders of magnitude:

• Fiscally favorable cantons (Schwyz, Zug, Nidwalden): 5 to 6% on large amounts.
• Average French- or German-speaking cantons: 7 to 9%.
• Most expensive cantons (Geneva, Basel-City, Zurich): up to 10 to 13%.

The scale is separate from ordinary income and progressive on the withdrawal amount. The higher the capital, the higher the marginal rate — although still well below the ordinary scale.

Home country tax side

Most bilateral tax treaties between Switzerland and EU/EFTA countries (and many others) allocate taxing rights similarly. In practice:

• The paid LPP capital is taxable in the residence country as a retirement pension within the meaning of the treaty.
• The Swiss source tax opens the right to a tax credit in the home country, to avoid double taxation.
• The exact terms (marginal rate, allowance, flat-rate taxation) vary by country and situation. Engaging a tax specialist is strongly recommended for large capital.

Option 2 — Leave it in a vested benefits account in Switzerland

Possible until 5 years after the ordinary Swiss retirement age. Advantage: no taxation as long as nothing is withdrawn, and assets continue earning interest (small but compounded).

To consider if:

• You approach retirement and prefer a planned exit (annuity or staggered capital).
• You keep the possibility of returning to Switzerland — the assets will remain available for a new fund.
• You want to take advantage of a possible transfer to a fiscally favorable canton before withdrawal.

Option 3 — Transfer to a foreign pension scheme?

No, not directly. No legal mechanism allows a frictionless transfer of the Swiss 2nd pillar to a foreign retirement plan (French PER, UK SIPP, German Riester, etc.). The exit always goes through a withdrawal (capital or annuity) followed, if you wish, by a separate investment in your home country.

And above all: find the money

Everything above assumes you know where your assets are. If you had several employers in Switzerland, or if your last employer paid into vested benefits without notifying you, your assets may be scattered. The Central 2nd-Pillar Office (Berne) holds orphan assets, but it does not cover private foundations — they must be queried one by one.

To dig into the tax part, read our dedicated article LPP withdrawal taxation abroad. And for the general mechanics of vested benefits, the full guide.