Swiss Pensions
Switzerland implemented its Pillar 1, 2 & 3 system for pensions with the objective of having a world leading national pension system, even the envy of the world it has been said!
For expat professionals who are currently working in Switzerland, or have done so in the past, Swiss Pillar 2 & 3a pensions advice is a critical part of one's overall financial planning. Occupational schemes are mandatory in Switzerland, and the benefits associated with the schemes tend to be fairly comprehensive. The Swiss government also offers key tax reliefs for personal contributions across Pillars 2 & 3.
Our knowledge and expertise enables us to advise on the most appropriate and advantageous ways for one to benefit from various tax-efficient opportunities.
Currently working in Switzerland, pillar 3a:
The majority of expats working in Switzerland will take advantage of the Pillar 3a pension.
This is a popular choice for those who wish to contribute towards regular savings and build wealth, in a tax-efficient manner.
As at 2023, the annual limit for such contributions are Employed persons with a pension fund can pay in up to CHF 7,056. Employed persons without a pension fund can pay in 20% of their net earned income, up to a maximum of CHF 35,280 These amounts being classed as tax-deductible.
Retail and private banks across Switzerland offer 3a's, however for those who wish to enhance the insurance values of these plans one may utilise insurance companies - thus combining elements of both investment growth and insurance coverage.
At Speciality Advice, we work with a number of key providers with the aim of helping you find the most appropriate and beneficial pillar 3a relevant to your needs.
When leaving Switzerland, and perhaps moving on to another overseas post, or back to your home country, we can assist with the smooth and tax-efficient transfer of these assets.
Swiss pillar 2 pension:
One often asks, "should I make additional personal contributions to my second pillar whilst I am working in Switzerland"?
It's important for you to be aware of the tax benefits in making such personal contributions to your second pillar.
One should also consider the specified limits for doing so, and the rules around accessing these funds in the future, particularly if one day leaving Switzerland. Also, any other advantageous ways to contribute towards the likes of pensions for those with freely disposable income, or lump sums.
In leaving Switzerland, one is inevitably faced with the process of accessing their pillar 2 assets (and pillar 3a if relevant) or indeed transferring these assets elsewhere.
Our expertise enables us to provide you with the advice required to ensure that you are taking these assets in the most tax-efficient way (considering Swiss withholding taxes etc.) and secure manner, and in many cases specialist cross-border advice to help mitigate any potential tax liabilities in the new country of residence. The relationships that we have with tax specialists across multiple countries/jurisdictions helps to facilitate this process.
To find out more, please get in touch today