Retirement for cross-border workers employed in Switzerland

AVS: you contribute and you receive your pension

As a cross-border employee working in Switzerland, you pay into the AVS like any employee. These contribution years count towards your future 1st-pillar pension, which is paid even if you live abroad at retirement.

The agreements between Switzerland and the European Union coordinate insurance periods: your Swiss years and your years in an EU country are each taken into account by the relevant scheme to open your rights, with no double counting and no loss.

2nd pillar (LPP): savings that stay yours

Like any employee above the entry threshold, you build up 2nd-pillar savings with your employer's pension fund. These savings belong to you and remain yours even if you change jobs or leave Switzerland.

At retirement you can in principle take a pension or a lump sum, depending on the fund's rules. The mandatory part cannot be withdrawn in cash before retirement age, except in cases provided for by law.

Leaving Switzerland before retirement

If you stop working in Switzerland before retirement, your LPP savings are transferred to a vested-benefits account or policy. They stay there until your retirement.

A cash payout of the extra-mandatory part is often possible on permanent departure to a country outside the EU/EFTA. For a move within the EU, the mandatory part generally stays locked until retirement age.

Tax: where is your retirement taxed?

The taxation of pensions and lump-sum withdrawals depends on the double-taxation treaties between Switzerland and your country of residence. Depending on the case, taxing rights belong to Switzerland, to the country of residence, or are shared.

A lump-sum withdrawal of 2nd- or 3rd-pillar capital by a non-resident is subject to Swiss withholding tax, sometimes recoverable under the applicable treaty. This is worth checking before choosing between pension and lump sum.

3rd pillar: under conditions

Pillar 3a is in principle reserved for people taxed in Switzerland on their earned income. Some cross-border workers taxed at source in Switzerland (quasi-resident status) can access it and deduct their contributions.

If 3a is not open to your situation, savings solutions in your country of residence can supplement your provision. The key is to have a complete view of your rights on both sides of the border.

Frequently asked questions

Does a cross-border worker receive a Swiss AVS pension at retirement?

Yes. By paying into the AVS while working in Switzerland, you build up rights to a 1st-pillar pension, which is paid even if you live abroad at retirement.

What happens to my 2nd pillar if I leave Switzerland?

Your LPP savings are transferred to a vested-benefits account and kept until retirement. A cash withdrawal of the extra-mandatory part is possible on permanent departure outside the EU/EFTA.

Where is my Swiss retirement taxed if I live in France?

It depends on the double-taxation treaty between Switzerland and France. Depending on the type of benefit (pension or lump sum) and your status, taxing rights may belong to Switzerland, to France, or be shared.

Can a cross-border worker pay into the 3rd pillar (3a)?

Pillar 3a targets people taxed in Switzerland on their income. A cross-border worker taxed at source in Switzerland, under quasi-resident status, can sometimes access it. Check based on your tax situation.