Vested Benefits Account: Who Qualifies and What You Get
Learn how to safely store your pension assets when changing jobs or working for yourself in Switzerland.
A Vested Benefits Account (known in German as a Freizügigkeitsleistung) provides a way to hold and protect your pension assets when you are no longer part of a specific pension fund.
Who it's for
This account is intended for individuals who find themselves in a transitional period regarding their employment or business structure. Specifically, it is for those who are changing jobs and need a place to move their existing pension assets, as well as self-employed individuals who require a way to manage these specific funds outside of a traditional employer-linked pension fund.
What you get
The primary benefit is the safe storage of your pension assets. When you leave an employer, your earned pension entitlements must be moved; this account provides a dedicated and secure environment to hold those funds. It ensures that your retirement savings remain intact and protected while you are between roles or managing your own business affairs, preventing the assets from being lost or misplaced during a career transition.
What it costs you
Maintaining this account is not free. You will be responsible for paying administrative fees to the bank that manages the funds. These fees cover the costs of managing your pension assets and keeping the account active. You should check with your chosen provider to understand how these fees are applied to your specific balance.
The catch to know
The most significant trade-off to consider is that these accounts often provide low interest rates. While the primary goal is the security and storage of your pension assets, the growth of the money through interest may be minimal compared to other types of investments.
How to apply
- Contact your current or previous pension fund to confirm the total value of your assets.
- Compare different banks to see which provider offers the most suitable terms for your needs.
- Open a Vested Benefits Account with your chosen bank.
- Provide your bank's details to your previous pension fund so they can transfer your assets directly to your new account.