For those who work in Switzerland while remaining resident abroad, the capital accumulated in the pension fund often represents the largest amount of savings built up over a working lifetime.
However, it is not money that can be accessed at any time: Swiss law clearly defines the circumstances in which second-pillar assets can be withdrawn, and for those living across the border there are some specific rules worth understanding before taking any action.
Image generated with artificial intelligence When Can You Withdraw Your Second Pillar?
The first misconception to clear up concerns cross-border workers themselves: talking about “leaving Switzerland” may seem inappropriate for someone who has never actually lived there, but in practice what matters to the pension fund is the end of the employment relationship with the Swiss employer, not a physical change of residence.
It is this event, together with three others, that can effectively make it possible to request a withdrawal of the capital.
Retirement
This is the most straightforward case: once you reach the reference retirement age – currently 65 for men, while for women it is gradually increasing from 64 to 65 by 2028 (in 2026, it is 64 years and 6 months for women born in 1962) – you are entitled to withdraw the assets you have accumulated, either as a monthly pension, a lump-sum payment, or a combination of the two.
Some pension funds also allow early retirement from the age of 58, or let you defer withdrawal until age 70 if you continue working.
In this PDF document, you can find the latest information on retirement ages.
Permanent Cessation of Employment in Switzerland
When your employment relationship with a Swiss company ends and you do not immediately start another job in Switzerland, you leave the pension fund. At this point, where you live or move to makes a difference:
- if you settle in – or remain in – an EU/EFTA country, you can withdraw in cash only the non-mandatory portion of your pension assets; the mandatory portion must remain in a vested benefits account or institution until you reach the reference retirement age, except in the cases described below;
- if you move to a country outside the EU/EFTA, you can generally withdraw the entire amount as a lump sum.
This distinction is often underestimated, and it is why many people living abroad only discover at the time of their application that part of their pension assets will remain blocked in Switzerland for several more years. You can find full details from the Swiss LPP Guarantee Fund here.
Starting a Self-Employed Activity
Anyone who decides to become self-employed in Switzerland as their main occupation may request the release of their pension assets. The request must be submitted within one year of starting the business. Important note for those living abroad: If you start a business in an EU/EFTA country, bilateral agreements apply. If your self-employment makes you subject to the mandatory state social insurance system of that country, you cannot withdraw the mandatory portion of your LPP in cash; it must remain blocked in a Swiss vested benefits account. In this case, only the non-mandatory portion can be released.
Purchasing Your Own Home
The second pillar can be used to finance the purchase, construction or renovation of a home you own, including abroad, under the so-called home ownership promotion scheme (PPA/EPL). This can also apply to a property located outside Switzerland, such as in the case of a cross-border worker buying a home in another country: the bilateral agreements between Switzerland and the European Union do not exclude this possibility.
Before looking at the main conditions, it is important to note that this can be a useful option, but it comes with specific restrictions:
- the property must be your own primary residence, or that of your household, and cannot be a second home or a rental investment;
- the minimum amount that can be withdrawn is CHF 20,000, and after the age of 50 the maximum amount available for withdrawal is capped.
For more information on this scenario, see our dedicated guide to withdrawing your second pillar to purchase your first home abroad.
Image generated with artificial intelligence The Practical Process: Who to Contact
Once you have confirmed that you fall into one of these situations, the request must be submitted to your pension fund (or to the vested benefits institution, if the assets have already been transferred there while awaiting a decision).
To start the process, you will generally need:
- a valid identity document;
- the bank details (IBAN) of the account where the payment should be made;
- proof of the situation that entitles you to withdraw the funds, such as the termination letter for your employment contract or confirmation of your registration as a self-employed worker.
There is no single fixed processing time that applies to all pension funds: the law simply provides that, if the pension institution delays payment beyond the due date, default interest must be applied. Processing times are naturally longer for withdrawals linked to the purchase of a property, as a restriction must also be entered in the land register.
If, at the end of the employment relationship, you do not immediately indicate which institution the assets should be transferred to, the pension fund is required to transfer them to the Substitute Occupational Benefit Institution no earlier than six months and no later than two years after the employment relationship ends. The assets will then still need to be actively reclaimed at a later stage.
What Remains Locked In, and Why
It is worth stressing this point because it is one of the most common questions among cross-border workers who leave their Swiss employer without retiring: if none of the exceptions apply (self-employment, home purchase, a very small amount, or disability), the mandatory portion of the capital is not something that needs to be dealt with immediately. It simply remains invested in a vested benefits account or policy until you claim your retirement benefits. Note that vested benefits accounts do not guarantee a statutory minimum interest rate; the rate is set by the managing institution and can be very low or even 0%. It is worth making a note of this, because the capital must be actively claimed and is never paid out automatically.
It is also worth noting that the parameters currently in force – including the entry threshold, coordination deduction and minimum conversion rate – remain those confirmed after the LPP reform was rejected by Swiss voters in September 2024. For anyone planning a withdrawal in the coming years, this means there are currently no major structural changes on the horizon to take into account.
Once the withdrawal has been approved and the capital has been received in Swiss francs, the process is not yet complete: you still need to manage taxation in Switzerland and in your country of residence and, just as importantly, the conversion into your local currency, where even a small difference in the exchange rate can have a significant impact on the final amount received. Our dedicated guide to the second pillar covers these aspects in greater detail.
Knowing in advance which situation applies to you, and what your pension fund will require, helps you avoid surprises and plan more confidently for the moment when this capital, built up year after year while working in Switzerland, finally becomes available to you.
If you have any questions or would like assistance with converting your second-pillar (LPP) pension assets abroad, you can always contact us.