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Withdrawing your LPP to go self-employed: conditions and procedure.
Starting a self-employed activity in Switzerland lets you withdraw your full 2nd pillar — under strict conditions. Here are the rules, the procedure, and what to check beforehand.
Par Pillarum
Article éditorial · sources vérifiées
8 min de lecture
Published
You leave salaried employment to become self-employed. The FZG (Vested Benefits Act) provides that you can withdraw your full 2nd pillar in cash — including the mandatory part. One of the three legal cases of full payment. Here are the conditions, the procedure, and common pitfalls.
Why this option exists
The 2nd pillar is tied to the salaried regime. Becoming self-employed means exiting the mandatory social insurances tied to an employer — LPP is no longer mandatory (except voluntary affiliation). The law therefore allows you to recover the capital so it funds the start of the activity, or simply so it does not remain locked in vested benefits without contributions.
The three conditions to meet
To benefit from the withdrawal under FZG article 5 para. 1 let. b, cumulatively you need:
| Condition | Required supporting document |
|---|---|
| Self-employed status recognized by the AVS office | Written confirmation from the AVS compensation fund certifying main self-employed status |
| Actual exit from the mandatory LPP regime | Termination of salaried employment, or exclusive self-employed activity (no parallel salaried work above the LPP threshold) |
| Application within the allowed deadline | Deadline varies by fund (generally 1 year after the start of the activity). To request from setup. |
Source : FZG art. 5 para. 1 let. b — 2024 application
AVS self-employed status is not automatic
For the AVS office, you are self-employed if you bill several clients, bear the economic risk, organize your work freely, and pay social contributions personally. An activity with a single client, under direction, can be reclassified as salaried — in which case the LPP withdrawal would be refused. Ask for the written confirmation from the AVS office before initiating the procedure.
The procedure
Procédure
From start of activity to payment
Allow 4 to 8 weeks between the complete application and actual payment.
Register as self-employed with the AVS office
Before everythingRegistration with the cantonal AVS compensation fund (or professional fund of your sector). Presentation of documents: ID, client/contract evidence, activity plan.Obtain the self-employed status certificate
2-6 weeksThe AVS office reviews the file and issues a written attestation confirming the status. This is the key document for what follows: without it, no foundation will release the assets.Build the withdrawal file
~1 weekWithdrawal application form (provided by the foundation), AVS attestation, ID, written spouse consent if married (FZG art. 5 para. 2). Consent required even if the cause is self-employment.Send to the holding foundation
ImmediateThe active pension fund OR the vested benefits foundation if the assets were transferred there. Send by registered mail to keep proof of the date.Review and tax statement
3-5 weeksThe foundation checks the file, calculates the source tax applicable in its canton, prepares the statement. You receive a written decision with the net amount.Payment and tax return
VariableAssets paid to your personal bank account. The foundation provides the tax certificate; you declare the withdrawal to your cantonal administration in the annual return.
Partial withdrawal: possible but rarely used
Legally, you can withdraw only part of your assets and leave the rest in vested benefits. This option has its interest:
- You keep a vested benefits envelope that continues earning interest and stays fiscally locked (useful if you return to salaried work or for retirement).
- You only trigger tax on the part withdrawn.
- The remaining assets can be reactivated if you become salaried again later (transfer to a new fund).
In practice, many self-employed people take the full amount — either to finance the start, or because they plan to replace LPP with an enhanced 3rd pillar 3a/3b.
And after? The self-employed 3a option
Once self-employed without LPP, you can contribute up to 20% of your income to the 3rd pillar 3a (2024 annual cap: CHF 35,280). Well above the cap for salaried persons (CHF 7,056 in 2024). A major tax advantage often justifying leaving LPP rather than seeking voluntary affiliation.
A concrete worked example
Cas concret
Thomas, 35, engineer going freelance
Worked 8 years in Lausanne in a large industrial group. Starts a freelance consulting activity. Wishes to withdraw his LPP to fund startup costs and invest in equipment.
Hypothèses
- Total LPP assets
- CHF 138,000
- Foundation's canton
- Vaud
- Decision
- Full withdrawal
Résultats
- CH source tax (~6%)
- ~CHF 8,300 progressive Vaud rate on LPP withdrawal
- Net received
- CHF 129,700 usable as seed / working capital
- Self-employed 3a cap
- CHF 27,600 / year 20% of projected income CHF 138,000
The self-employed 3a cap is calculated as a percentage of the year's actual income. If Thomas earns less than expected in the first year, his 3a cap will be proportionally reduced. To adjust with the year's AVS return.
Before withdrawing, check where the money is.
We recover the full list of your LPP assets in 4 to 6 weeks, free of charge. You then decide what to do next.
Four common mistakes
- Requesting the withdrawal before the AVS attestation. The foundation automatically rejects. Always obtain the AVS attestation first.
- Mixed salaried + self-employed activity. If the salaried part exceeds the LPP threshold (CHF 22,680 in 2025), you remain enrolled and withdrawal of the mandatory part is refused.
- Forgetting the spouse's consent. FZG art. 5 para. 2 — notarized written consent or certified signature required. Without it, incomplete file, minimum 3-month delay to fix.
- Applying too late. The deadline varies by fund (often 1 year after start of activity). Beyond, assets may stay locked in vested benefits.
If the self-employed activity fails
If you go back to salaried work in the first months or years, you cannot "refund" the LPP withdrawal as you would for EPL. The money has permanently left the 2nd pillar system. You will start from scratch with your new pension fund. To consider in the decision to withdraw the full amount or only part.
À retenir
- 01Full LPP withdrawal possible if AVS self-employed status recognized as the main activity.
- 02The AVS attestation is the key document — obtain it before any foundation procedure.
- 03Tax at source at the pension rate — cantonal optimization possible (prior transfer).
- 04As self-employed without LPP: 3rd pillar 3a cap raised to 20% of income (CHF 35,280 max in 2024) — a major tax lever.
To compare with a withdrawal at retirement, read annuity vs lump sum at retirement. For cantonal withdrawal optimization, our taxation-by-canton comparison. And for the general context, the 2nd pillar intro.