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Pension fund: Enrollment and withdrawal

Facts and current legislation

What needs to be considered when changing jobs or becoming self-employed.


All about the enrollment in a new pension fund

Whether you're starting your very first job or joining a new company, working for a new employer means facing not only new tasks and challenges but enrolling in a new pension fund as well. "My pension fund" has been designed to explain the important things to consider.

Prerequisites for enrollment
  • You have reached age 18.
  • Your AHV salary is more than CHF 21,060 per year.
  • You have not yet reached regular retirement age.
  • You are employed permanently or for a fixed term of more than 3 months.
  • You are not already mandatorily insured for your primary occupation.
Properly prepared for the pension fund

AXA offers useful tips on how to join the new pension fund and prepares you for all eventualities.

  • What are the steps involved?

    Your employer notifies the pension fund regarding your enrollment. If you were insured under an occupational benefits plan with a previous employer, you are entitled to vested benefits from the pension fund you were enrolled in at the time and must have the assets transferred to the new pension fund.

    You can ask your new employer for a payment slip from the pension fund or for the exact payment instructions, which you then forward to your previous pension fund, if possible still before you withdraw.

     

    As a rule, entitlement to vested benefits begins only from the age of 25 because the savings process for Pillar 2 pensions starts only on January 1 following the year in which you reach age 24. From the age of 17 to the age of 24, the insurance covers only the risks of death and disability.

     

  • What special regulations apply?
    Medical examination

    If your pension fund's regulations define benefits above the statutory minimum, you may be asked for further information about your health when you enroll. If a very large amount in benefits is to be insured, the fund may require you to undergo a medical exam.

    Temporary benefit restrictions

    It's likely that your new pension fund will have higher benefits than in the past, in which case it may impose a restriction on the higher portion, should you have any health impairments. Any such restriction applies for a maximum of 5 years.
    No restrictions apply if the pension fund insures only the statutory minimum benefits.

  • Where can I find detailed information?

    Pension fund certificate

    Once you have enrolled with the pension fund, your employer will issue you a pension fund certificate (also referred to as personal certificate or pension certificate), which contains the following information:

    • Annual salary
    • Pensionable salary
    • Benefits on retirement, disability, or death
    • Retirement assets
    • Vested benefits
    • Maximum of an advance withdrawal to finance owner-occupied property
    • Possible amount with which to purchase additional benefits
    • Annual overall contribution
    • Annual employee contribution
    Pension fund regulations

    Your pension fund regulations contain a wealth of useful information, besides your pension fund certificate, and also explain the benefits and how they are financed. We recommend that you ask your employer for a copy. 

 

For persons insured with an AXA pension fund

Personal pension fund certificate

If your employer has sent you a personal certificate and you want to know where to find particular information or what certain figures and terms mean, you can refer to our sample certificate.

Reading aid: Pension fund certificate

Forms service

Are you insured with an AXA pension fund and need more information or want to take a look at your regulations? Simply download all the relevant documents from "Forms service".

Forms service

To access it you only need your contract number, which is included on the personal certificate you receive annually.



All about the withdrawal from a pension fund

Are you thinking to start your own business, to stop working for a while, or are you looking for a new challenge with another company? When you leave your job you not only leave your employer but withdraw from its pension fund as well. "My pension fund" has all the information you need for continuing your Pillar 2 coverage.

What happens when you withdraw from the pension fund?

Your former employer notifies your pension fund about your withdrawal. The pension fund then sends you a detailed statement about the vested benefits for which you are eligible.
If, at the time of withdrawal, you are of an age where early retirement would be possible under the regulations, you may consider opting for a retirement pension. By not enrolling in a new pension fund, your vested benefits are transferred to a vested benefits account or policy and the amount will not be available for drawing a pension.
By the way: Withdrawal from the pension fund is no longer possible if you are suffering from an occupational disability.

How are vested benefits used?
  • When changing employers
    You are required to transfer your vested benefits to your new employer's pension fund whenever you change your job. You can ask your new employer for a payment slip from the pension fund or for the exact payment instructions, which you then forward to your previous pension fund before you withdraw.
  • Leaving or taking time off from your job
    If you do not enroll in a new pension fund right away, your vested benefits will be transferred to a vested benefits account or policy. You will, however, remain insured with your previous pension fund against the risks of death or disability for one month after the employment relationship ends.
    If you enroll in a new pension fund at a later time, you will need to have your assets transferred from the vested benefits account or policy to the new occupational benefits institution.
  • When becoming self-employed

    You will no longer be mandatorily insured under Pillar 2 if you decide to become self-employed as your primary occupation in Switzerland. In this case you have three options for using your vested benefits:

    • Insure yourself voluntarily with your employees' pension fund, professional association, or the National Substitute Pension Plan and transfer your vested benefits to your new pension fund.
    • Deposit the amount in a vested benefits account or policy.
    • Have the assets paid out as a lump sum within a year from when you started to be self-employed.
  • Leaving Switzerland for good

    Relocating to an EU / EFTA country

    If you move to an EU / EFTA country where you will be mandatorily insured against the risks of old age, disability or death in accordance with local statutory requirements, you can request to have only the extra-mandatory portion of your vested benefits paid out. The mandatory portion will remain in a vested benefits account or policy in Switzerland until the conditions for a payment have been met.

    Relocating to a non-EU / EFTA country

    If you emigrate to a non-EU / EFTA country, you can ask to have all your vested benefits paid out as a lump sum.

    Cash payment

    You will need to present a number of documents in order to qualify for a cash payment. We recommend that you contact your pension fund for further information.

    Please note that a cash payment must be declared as income.

 

For persons insured with an AXA pension fund

Are you insured with an AXA pension fund and would like additional information about changing employers or a cash payment? Our document and forms service will provide you with the information you need.

Forms service



Frequently asked questions about the withdrawal from the pension fund

You are about to leave your current job and begin a new chapter in your career. It's only natural that you will have many questions on your mind. The experts at AXA will answer them fully and clearly so that you can face your professional future with certainty.

  • When changing employers
    What do I need to consider when changing my employer?

    Whenever you change employer, the assets from your current pension fund must be transferred to the new occupational benefits institution. You can ask your new employer for a payment slip from its pension fund or for the exact payment instructions, which you then forward to your previous pension fund, if possible still before you withdraw.

  • Steps when withdrawing from the pension fund for longer periods
    What do I need to consider if I leave my job and don't have a new one and am no longer insured with a pension fund?

    You will have to deposit your assets with a vested benefits institution. This leaves you with two options:

    • Open a vested benefits account with a bank of your choice, or with the National Substitute Pension Plan.
    • Set up a vested benefits policy with an insurance company of your choice.

    For this you will receive a form for entering the necessary account or policy information, which you then send to your former pension fund – if possible still before you leave. The pension fund then transfers your assets to the address as indicated.

  • Transferring assets to several institutions
    May I transfer a part of my vested benefits to the new pension fund and a part of it to a vested benefits account or policy when I change my job?

    No, in principle that's not allowed. Your old pension fund must transfer all your vested benefits to the new one.

    Exception: If you are unable to transfer all of your vested benefits to the new pension fund, you may transfer the unused portion to a vested benefits account or policy.

  • Payment of the assets when leaving Switzerland
    I'm about to leave Switzerland and will move to an EU / EFTA country permanently. Can I have my pension fund assets paid out?

    If you will continue to be mandatorily insured for old age, disability and death in that country, you can have only the extra-mandatory portion of your benefits paid out. The statutory minimum portion must remain in Switzerland and can be used only once you reach retirement age, or in the event of disability or death.

  • Payment of the statutory minimum portion when leaving Switzerland
    Are there any exceptions that would allow me to have my mandatory pension fund assets paid out if I emigrate to an EU / EFTA country?

    Yes, having assets from the mandatory portion paid out is possible in following cases:

    • The vested benefits amount on withdrawal is less than your annual contribution so far.
    • The regulations allow you to retire early.
    • You want to use the assets to finance your own home.
    • You are not covered mandatorily against the risks of old age, disability and death in the country in question and are able to present official proof to this effect from the relevant authority.
  • Payment of vested benefits on self-employment in an EU / EFTA country
    I'm planning to emigrate to an EU / EFTA country and start my own business there before I retire. Can I have the mandatory portion of my pension fund assets paid out?

    No, this is not an option if the EU or EFTA country requires you to have occupational benefits insurance.

    However, if you are not subject to mandatory benefits insurance, you can have the assets paid out as a lump sum.

  • Payment restriction: Group of persons affected
    Does the restriction regarding the cash payment of mandatory assets apply to everyone who emigrates?

    The restriction applies to all persons, regardless of nationality, who emigrate from Switzerland to an EU / EFTA country where they must be insured by law.



Explanation of important terms

Benefits case

A benefits case occurs when a person reaches retirement age, becomes disabled, or dies.

 

Contributions for the occupational benefits insurance

Pension funds collect contributions with which they finance their benefits. The contribution amounts depend on a number of factors, such as

  • the age and gender of the insured,
  • the type of pension plan,
  • the pensionable salary.

The pension fund regulations define how contributions are divided between employer and employees. Employer contributions must equal at least the total of those of all employees. The employer deducts the contribution amount from the insured employee's salary. 

 

Employee contribution

Employers and employees jointly participate in financing the occupational benefits insurance, whereby the employer deducts the employee contribution monthly from the salary.

 

Employer contribution

Employers and employees jointly participate in financing the occupational benefits insurance, whereby an employer's contributions must, by law, equal at least the total of those of its employees.

 

Federal Law on Vesting in Pension Plans

The Federal Law on Vesting in Pension Plans defines entitlement in the event of a claim, when pension coverage is maintained, and how to proceed when joining a new vested benefits institution.

The law applies to all pension relationships in connection with mandatory and extra-mandatory occupational benefits insurance.

 

Interest on occupational benefits

The Federal Council sets a minimum interest rate for retirement assets in occupational benefits accounts. The foundation sets the interest rate for the extra-mandatory assets.

 

Pensionable salary

Pensionable salary is the portion of your annual salary that is used for calculating your occupational benefits. Here, a distinction is made between the pensionable salary components that must be insured by law and those that are exempt from this requirement. See "BVG salary" and "Coordinated salary" for more information about pensionable salary.

 

Retirement age

The current regular retirement age is 64 for women and 65 for men. You can draw an AHV pension up to two years in advance or defer it by up to five years. The 11th revision of the AHV, which is currently under discussion, is looking at raising the retirement age and making it more flexible.

 

Retirement assets

Retirement assets are the amount that accrues in your occupational benefits account under a Pillar 2 plan. The available assets consist of

  • individual retirement credits
  • any vested benefits brought into the fund
  • possible amounts paid into the account by the employer and/or from a benefits purchase
  • interest earned on these amounts
  • surplus portions

The amount of your mandatory retirement assets is determined solely by the retirement credits and amounts that are paid into the account pursuant to the minimum BVG provisions, plus interest. The minimum interest rate is set by the Federal Council.

 

Retirement credits

Retirement credits are used to build up retirement assets. They comprise the savings contributions the employee and the employer pay into the account. The level of retirement credits is specified in the regulations of every occupational benefits institution and is generally defined as a percentage of the pensionable salary. Pursuant to the BVG, the following percentage rates apply:

 

Retirement pension

You can calculate your annual retirement pension by multiplying the retirement assets on the retirement date by the conversion rate that is valid at that time.

 

Unpaid leave

Unpaid leave is not the same as termination. The employment contract remains in force, only the salary is temporarily suspended. During unpaid leave, persons previously insured under the BVG generally have the option to continue their pension coverage without restrictions, or at minimum to remain insured against the risks of disability and death. Employer and employee share the contribution payments.

 

Vested benefits

If you withdraw early from an occupational benefits institution, you are entitled to the assets, referred to as vested benefits, that accrued during this time. The pension fund regulations define the vested benefits amount. The Federal Law on Vesting in Pension Plans guarantees a minimum amount.

 

Vested benefits account

If you temporarily or permanently withdraw from an occupational benefits institution (e.g. if you quit your job, take leave, or go abroad) and are unable to transfer your vested benefits to a new institution, you are nevertheless obligated to maintain all of your accrued pension assets. This leaves you with two options:

  • You can deposit your vested benefits in an account with a benefits institution.
  • You can use the amount to purchase a vested benefits policy.

 

Vested benefits policy

If you temporarily or permanently withdraw from an occupational benefits institution (e.g. if you quit your job, take leave, or go abroad) and are unable to transfer your vested benefits to a new institution, you are nevertheless obligated to maintain all of your accrued pension assets. This leaves you with two options:

  • You can use the amount to purchase a vested benefits policy.
  • You can deposit your vested benefits in an account with a benefits institution.

 

Vested benefits capital

A vested benefits case means you withdraw from your occupational benefits institution before a benefits case occurs (retirement, disability, death). This applies, for example, if you change your employer.

 

Voluntary enrollment, occupational benefits insurance

Not everyone is mandatorily insured under an occupational benefits plan. If you are self-employed or work for several employers, you can enroll voluntarily if your combined annual salary exceeds the BVG minimum salary.
Self-employed persons also have the option to enroll with the benefits institution of their professional association or of their employees. Otherwise they have the right to join the National Substitute Pension Plan.

 


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