2nd Pillar (LPP) — Leaving Switzerland

General information — Occupational pension

What Is the 2nd Pillar (LPP)?

The 2nd pillar (Federal Law on Occupational Pension, LPP/BVG) is the mandatory occupational pension system in Switzerland. Employer and employee contribute jointly. The accumulated capital is intended to supplement AVS (1st pillar) benefits to maintain the standard of living in retirement.

As a cross-border worker, you contribute to the 2nd pillar like any employee in Switzerland. The question arises when you leave your Swiss employment: what happens to your LPP capital?

Three Possible Scenarios

A — New Employment in Switzerland

If you start a new job in Switzerland, your LPP capital is transferred to the new employer's pension fund. This transfer is called a "vested benefits" (prestation de libre passage). No special action is required beyond providing the details of the new fund.

B — No New Job in Switzerland (Vested Benefits Account)

If you do not resume employment in Switzerland, your capital is transferred to a vested benefits account (or vested benefits policy) with a bank foundation or insurance company. The capital remains blocked until retirement age.

The capital continues to accrue interest
You can choose the vested benefits institution
Release possible at retirement age (or from 58 at the earliest for early retirement, where the fund's rules allow it)

C — Cash Withdrawal (Strict Conditions)

Early withdrawal of LPP capital is only possible in strictly defined cases:

Permanent departure from Switzerland to a non-EU/EFTA country (the mandatory portion can be withdrawn)
Departure to an EU/EFTA country: only the supra-mandatory portion can be withdrawn in cash. The mandatory portion remains blocked.
Becoming self-employed (independent gainful activity)
Purchase of primary residence (home ownership)

For cross-border workers returning to France (EU country): the mandatory LPP portion CANNOT be withdrawn in cash. It remains in a vested benefits account until retirement.

Mandatory vs Supra-Mandatory

Mandatory (LPP minimum)

Minimum contributions required by law. For cross-border workers leaving to the EU, this portion remains blocked in a vested benefits account.

Supra-Mandatory (extra-LPP)

Additional contributions made by the employer above the legal minimum. This portion can be withdrawn in cash when leaving for an EU country.

The pension certificate (LPP statement) from your pension fund indicates the split between mandatory and supra-mandatory portions.

Tax on Withdrawal

When withdrawing LPP capital (including the supra-mandatory portion), a withholding tax is levied by the canton where the pension fund is domiciled.

A withholding tax is deducted in Switzerland at the time of payment.
Under the Franco-Swiss tax treaty, it is possible to request a refund of this Swiss tax.
The capital received must be declared in France in the income tax return.

Official Resources

Federal Social Insurance Office (FSIO) — Occupational pensions FINMA \u2014 Occupational pension supervision

Vested benefit and withdrawal rules depend on the pension fund, canton, and your individual situation. Contact your pension fund for case-specific information.

AdminLanding does not provide financial or tax advice.

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