Vested benefits account: when to open one, how to invest it and when to withdraw

When do you receive vested benefits?

Vested benefits are the savings your pension fund owes you when you leave it before retirement. If you start with a new employer, they must be transferred to that employer's pension fund. A vested benefits account only comes in when no pension fund can take the money.

That happens during unemployment, a sabbatical, a move abroad, a switch to self-employment, a salary that drops below the LPP threshold (CHF 22,680 in 2026), or a divorce, when the share awarded to the former spouse cannot go into a pension fund.

If you give no instructions, your former pension fund transfers the money to the Substitute Occupational Benefit Institution (Stiftung Auffangeinrichtung BVG), at the earliest six months and at the latest two years after you leave. The money is not lost, but it is invested very conservatively.

Account or policy, and a maximum of two

A vested benefits account is opened with a bank foundation: a locked account, optionally combined with securities. A vested benefits policy is taken out with an insurer: it can include death or disability cover, but it is less flexible and its fees are less transparent.

The law lets you split your savings across at most two vested benefits institutions. Since each account is normally withdrawn in one go, two accounts allow two withdrawals in different years, and therefore less tax. Split at the initial transfer: a later split depends on the foundations.

Interest or securities: what it means over 15 years

On a standard account, interest has been close to zero in recent years: a few tenths of a percent. Most vested benefits foundations also offer securities solutions (25% to 100% equities), with a higher expected return but a risk of loss and annual fees ranging from a few tenths of a percent to more than 1%.

Your time horizon is decisive: money locked for 15 years can carry equities; money that will join a pension fund in six months cannot. To compare offers, look at the interest rate, the total fees (foundation plus funds), the maximum equity share and whether you can split across two accounts. On CHF 150,000, an extra 0.5% in fees costs CHF 750 a year.

When can you withdraw your vested benefits?

You can withdraw the money at the earliest five years before the reference age (from 60) and at the latest five years after it (70). Deferring beyond 65 normally requires you to keep working.

Before 60, a payout is only possible in specific cases: leaving Switzerland for good, starting self-employment without LPP affiliation, a full disability pension, or buying your main home (home-ownership early withdrawal, WEF/EPL), on the same conditions as with a pension fund.

Moving to the EU or EFTA: if you are compulsorily insured there, the mandatory part stays locked in Switzerland until retirement; only the extra-mandatory part can be paid out. Outside the EU/EFTA, the full balance can be withdrawn.

Tax on withdrawal, and why staggering pays

While locked, the savings are exempt from wealth tax and their returns from income tax. On withdrawal, they are taxed separately from your other income at a reduced rate, like any 2nd-pillar or 3a lump sum: one fifth of the ordinary scale for federal tax, and a reduced scale specific to each canton.

That capital withdrawal tax is still progressive, and lump sums withdrawn in one year are generally added together. Withdrawing CHF 400,000 at once therefore costs noticeably more than two withdrawals of CHF 200,000 in different years, for example at 60 and 63, coordinated with your 3a accounts.

If you leave Switzerland, withholding tax is deducted according to the canton where the foundation is based; depending on the double taxation agreement, it can be refunded on request.

Forgotten savings: the Central Office for the 2nd Pillar

After several job changes, savings are easily lost track of. The Central Office for the 2nd Pillar (Zentralstelle 2. Säule), part of the LPP Guarantee Fund (Sicherheitsfonds BVG), records the balances reported by pension funds and vested benefits foundations. A search is free and only needs your AVS number.

Balances still unclaimed ten years after the reference age are transferred to the LPP Guarantee Fund, so run the search as soon as you start planning your retirement.

Bringing your vested benefits into your plan

A vested benefits account is a piece of your 2nd pillar that is withdrawn as a lump sum: it affects your tax, the capital available to you and therefore the age at which you can stop working. In RetirePlan, you can add it to your plan, choose the year of withdrawal and compare a single withdrawal with a staggered one, free and with unlimited scenarios.

For an outside view of your full situation, an analysis with an expert is available as an option; the tool itself remains entirely free.

Frequently asked questions

What happens if I do not open a vested benefits account?

Your former pension fund transfers your savings to the Substitute Occupational Benefit Institution, at the earliest six months and at the latest two years after you leave. The money is kept, but invested very conservatively.

How many vested benefits accounts can I have?

No more than two vested benefits institutions for the same benefit. Since each account is normally withdrawn in one go, two accounts let you spread the withdrawal over two different tax years.

From what age can I withdraw my vested benefits account?

At the earliest five years before the reference age (from 60 with a reference age of 65) and at the latest five years after it (70). Before that, only leaving Switzerland, self-employment, buying your main home or disability allow it.

How is a vested benefits withdrawal taxed?

Like a 2nd-pillar lump sum: separately from income, at a reduced rate (one fifth of the ordinary scale for federal tax, plus a reduced cantonal scale). The rate is progressive, which is why spreading withdrawals over several years pays off.

Can I withdraw my vested benefits if I move to France or Germany?

Only the extra-mandatory part, if you are compulsorily insured in that country's social security system. The mandatory part stays locked in Switzerland until retirement age. If you move outside the EU/EFTA, the full balance can be paid out.

How do I find forgotten vested benefits?

Send a free search request with your AVS number to the Central Office for the 2nd Pillar (LPP Guarantee Fund). It tells you which pension fund or foundation holds your money.