According to the Federal Department of Foreign Affairs, around 11% of the Swiss population live abroad, mainly in Europe, and this trend is increasing. They are all seeking a better, or at least different, life – be that on the beach or close to icebergs. Yes, even in Greenland there are around 10 Swiss emigrants. Emigration may be one of the greatest adventures you embark upon in your life so it comes with a great deal of uncertainty. What can I expect in my new home? How will I get my bearings? Will my dreams be fulfilled? Or will I soon return to Switzerland?

Good planning for great happiness when emigrating

Something that offers a huge amount of security in this great adventure and in the planning of any emigration is dealing promptly with your retirement planning. Because living abroad can swiftly increase the risk of leaving gaps in your retirement planning – which may mean doing without a proportion of your pension when you're older. But pensioners too should plan their emigration carefully. 

Emigration for those of working age

Managing AHV inpayments, drawing on pension fund assets and withdrawing the 3rd pillar?

Are you young and heading abroad to take that perfect job, become self-employed or work for a Swiss company? Those who are not yet pensioners should examine their personal retirement planning situation particularly carefully before packing their suitcases and booking their flights – there are several things to consider from the 1st to the 3rd pillar.

Those who no longer live and work in Switzerland are not covered automatically by the state pension (1st pillar). This not only means that no contributions are paid into the AHV to make provision for old age, but also that you are no longer automatically covered in the case of death or disability. Different conditions apply depending on where you emigrate:

I am emigrating to an EU/EFTA country

You are usually covered by the social security system in your new country of residence. It is worth finding out detailed information in advance about the scope and content of social security in the relevant country.

I am emigrating to a non-EU/non-EFTA country

Here, the situation depends to a large extent on the country to which you want to emigrate. There are countries with and without social security agreements with Switzerland. Please contact the relevant social security office in your new country of residence for information.

Please note that inpayments of AHV/IV contributions in Switzerland do not release you from the obligation to contribute in your country of residence.

If you are emigrating with your family, you need to insure each person voluntarily and individually. You can pay in voluntarily to AHV/IV to ensure your insurance term with AHV/IV is uninterrupted. For this, the following points must be fulfilled:

• You have Swiss citizenship or citizenship of an EU or EFTA country
• Application for voluntary inpayment must be made within one year of your withdrawal from obligatory insurance
• You must have paid into AHV/IV for at least five years previously without interruption

Voluntary inpayment for emigrants in countries outside of the EU/EFTA brings some advantages:

• Uninterrupted insurance period with AHV/IV (no contribution gaps)
• Assumption of reintegration measures through IV
• Higher AHV/IV benefits when retiring, on death or becoming disabled

I am emigrating and work for a Swiss employer abroad

In order to continue the obligatory insurance, a written request signed by the employer and the employee must be submitted to the employer's compensation office. The request must be submitted no more than six months after the day on which the employee fulfils the preconditions for continuation of obligatory insurance. The employer is not obliged to agree. The relevant compensation office will be glad to give further information.

What happens with your 2nd pillar

Our tip: Speak to your pension fund institution before you emigrate to find out exactly which options are available to you abroad and how you should proceed with your emigration. This means you’ll be well informed and have the confidence to handle all the other things you need to deal with.

Your options for the 3rd pillar

When you emigrate, you can have your assets from private retirement planning (pillar 3a) paid out – regardless of how old you are when you emigrate and where you emigrate to. In this case, it is important to deal promptly with the tax aspects: 

Tax at source is deducted when your assets are paid out if you already live abroad. How much this is depends on where the employee benefits institution is located. So before payout, it can be worth transferring your 3rd pillar assets to a foundation based in a canton with lower interest.

If you move your retirement assets before you register your departure from Switzerland, you'll pay a capital gains tax. Usually this is higher than the tax at source.

Final exit from Switzerland (payout not possible earlier than one month before leaving Switzerland)

• Copy of deregistration certificate from the Swiss residents' registration office (deregistration date no longer than one year ago) or
• Copy of current residence certificate abroad or
• Affidavit abroad (certified self-confirmation of residency)
• Signature and copy of a current ID document from spouse / registered partner
• Official confirmation of marital status (no more than three months old) if not married or if not living in a registered partnership

Please note: this section does not constitute tax advice but offers some basic information from current tax legislation. Contact your tax advisor for comprehensive advice before you emigrate.

Emigration after retirement

Here’s how it works with AHV and the 2nd pillar

Do you want to enjoy your retirement on the beach? Or return to your homeland? Pensioners who leave Switzerland and seek a new place of residence abroad should contact their pension fund institution and AHV compensation office as early as possible to inform them about this change of place of residence. Otherwise, you risk late pension payouts in certain circumstances. You can have your AHV pension paid directly into your new account abroad – wherever in the world your new place of residence is located. For payments from the pension fund, you usually need a Swiss account. Of course, the option that you chose for payment of your pension money before retiring (lump sum or annuity pension) remains open to you even if you move abroad. 

Emigration for early retirees

Pay AHV contributions voluntarily and avoid contribution gaps

For those retiring early, it depends where you emigrate to: are you moving to an EU/EFTA country or to a non-EU country?  

I am emigrating to an EU/EFTA country

You are usually protected by the social security system in your new country of residence. It is worth finding out detailed information in advance about the scope and content of social security in the relevant country.

I am emigrating to a non-EU/non-EFTA country

Then you can  opt in to AHV voluntarily and avoid contribution gaps. However, this is only possible under the following circumstances:

• The application for voluntary inpayment must be made within one year
• You must have previously paid into AHV/IV for at least five years without interruption

Voluntary inpayment offers the following advantages:

• Uninterrupted insurance period with AHV/IV (no contribution gaps)
• Assumption of reintegration measures through IV
• Higher AHV/IV benefits when retiring, on death or becoming disabled

Here’s what happens with your 2nd pillar

As an early retiree, you can draw on your assets from the 2nd pillar as a lump sum or as a monthly annuity pension – regardless of whether you live in Switzerland or somewhere else in the world. If you withdraw money from the 2nd pillar when you live abroad, you will pay tax at source instead of a capital tax. If Switzerland has a double taxation agreement with the country where you now live, you can reclaim the tax at source in your new country of residence. Your tax advisor can assess your personal tax situation for emigration and advise you accordingly.

Your options for the 3rd pillar

Not withdrawn your pillar 3a funds yet? Basically, you can draw on your pillar 3a account for early retirement (from age 59 or 60) regardless of where you live. If you emigrate, you can draw on your pillar 3a money even earlier. It's important to know that if you are no longer earning income liable for AHV, you are not permitted to pay in to your pillar 3a.

If you have several pillar 3a accounts, it can be worth staggering your withdrawals so as to reduce progressive taxation. You need to consider the following points when drawing on your 3rd pillar and emigrating: 

• When withdrawing your assets, a tax at source will be deducted if you already live abroad when making the withdrawal. How much this is depends on where the employee benefits institution is based. So before payout, it can be worth transferring your 3rd pillar assets to a foundation based in a canton with lower interest.
• If you move your retirement assets before you register your departure from Switzerland, you'll pay a capital gains tax. Usually this is higher than the tax at source. 

Please note: this section does not constitute tax advice but offers some basic information from current tax legislation. Contact your tax advisor for comprehensive advice before you emigrate.

Safe emigration – safe retirement planning

You'll face many unexpected things when you emigrate. Your retirement provision and insurance against death and disability shouldn’t and doesn’t need to be part of that – if you deal comprehensively with your retirement situation before you pack your suitcase and put in place all that’s needed, you'll have peace of mind to simply enjoy your new home. With your retirement planning, you can even save for your emigration: it can be very worthwhile investing your pillar 3a money in a retirement fund if you plan  to move abroad in five to ten years. This gives you the opportunity to benefit from the trends on the financial markets during this time before you can have your 3rd pillar paid out.