How can you preserve your Swiss pension capital when leaving?
When moving to Hungary, the mandatory portion of the second pillar often cannot be withdrawn as a lump sum. Here is how payment, withholding tax and tax refunds work.
Can I withdraw my second-pillar capital in cash if I move to Hungary?
Only partially. The decisive factor is whether you move to an EU/EFTA member state and whether you become subject to compulsory social insurance there.
Hungary is an EU member state, so Hungarian nationals fall within the scope of the Agreement on the Free Movement of Persons (FZA, 1999). As a result, second-pillar capital is treated differently than for someone moving to a country outside the EU/EFTA.
The core rule can be divided into three categories:
Destination country / situation | Mandatory portion (Obligatorium) | Non-mandatory portion (Überobligatorium) |
|---|---|---|
EU/EFTA member state (e.g. Hungary), with compulsory insurance there | Cannot be paid out in cash | Can be withdrawn in cash |
EU/EFTA member state, with no compulsory insurance there | May be paid out (following verification) | Can be withdrawn in cash |
Country outside the EU/EFTA | Full capital can be paid out in cash | Full capital can be paid out in cash |
The non-mandatory portion can therefore always be withdrawn in cash upon permanent emigration, regardless of the destination country.
The fate of the mandatory portion, however, depends on whether you are required to pay compulsory pension and social insurance contributions in Hungary. If so—for example, through employment or self-employment—the mandatory portion cannot be paid out in cash; instead, it remains in a Swiss vested benefits account.
What are the mandatory and supplementary portions, and why does this matter when leaving Switzerland?
Second-pillar capital (occupational pension fund, Berufliche Vorsorge / BVG) consists of two components, and the cash withdrawal rules differ for each.
The mandatory portion (Obligatorium) is the minimum pension savings required by law. It is subject to stricter protection: when moving to an EU/EFTA member state, it can only be paid out if you do not become compulsorily insured there.
The supplementary portion (Überobligatorium) consists of savings above the statutory minimum, resulting from more generous pension fund rules set by the employer or a higher salary. The restriction above does not apply to this portion.
This distinction is crucial because the statement issued by the pension fund upon departure generally shows the termination benefit (Freizügigkeitsleistung) as two amounts: the total capital and, within it, the mandatory portion. Without these two figures, it is not possible to calculate in advance how much can actually be withdrawn in cash.
Practical consequence: anyone moving to an EU/EFTA member state and becoming insured there can generally receive only the supplementary portion immediately, while the mandatory portion remains in a Swiss vested benefits account (Freizügigkeitskonto).
How does the BVG Guarantee Fund verify compulsory insurance obligations in Hungary?
The BVG Guarantee Fund (Sicherheitsfonds BVG) is the body that examines whether the mandatory portion can be paid out.
The purpose of the assessment is to determine whether you become compulsorily insured under the state pension and social security system in the new EU/EFTA country—Hungary. The Sicherheitsfonds BVG verifies this in cooperation with the authorities of the host country.
If the assessment finds that you are subject to compulsory insurance in Hungary, the mandatory portion cannot be paid out in cash. If no such obligation exists, the mandatory portion may also be released.
This mechanism reflects coordination at EU level: its purpose is to prevent someone from withdrawing their Swiss mandatory pension capital in cash while simultaneously becoming part of another member state's compulsory system. From a Hungarian perspective, this means that having a Hungarian social security affiliation directly affects access to Swiss capital.
When can the verification of compulsory insurance obligations be initiated?
The verification cannot be initiated immediately upon moving. According to the dossier, the assessment of compulsory insurance obligations may be requested only at the earliest 90 days (3 months) after deregistering from Switzerland and ceasing gainful employment in Switzerland.
This waiting period is a practical planning consideration. Withdrawing the supplementary portion and settling the status of the mandatory portion do not necessarily take place at the same time.
During the process, it is advisable to address the following together:
The deregistration of the Swiss address (Abmeldung) with the Migrationsamt and the municipality.
Documented cessation of gainful employment in Switzerland.
An application submitted to the Sicherheitsfonds BVG after the 90-day period has elapsed.
Appropriate documentation of insurance status in Hungary.
The exact application form and list of required attachments are available on the official website of the Sicherheitsfonds BVG; a separate online form is available for those moving to an EU Member State.
What happens to the termination benefit if no instructions are provided?
If no instructions are provided regarding the termination benefit (Freizügigkeitsleistung) after the employment relationship ends, the capital is not “lost”, but is transferred to a central system.
In such cases, the former pension fund must no later than within six months transfer the capital to the BVG Substitute Occupational Benefit Institution (Stiftung Auffangeinrichtung BVG). This rule applies in the version in force as of 1 January 2026.
The Stiftung Auffangeinrichtung BVG subsequently opens an interest-bearing vested benefits account (Freizügigkeitskonto) in your name and manages the assets there until you come forward to claim them.
This means that the capital remains safe, but a passive approach has two disadvantages:
You do not choose the provider of the vested benefits account or its terms and conditions.
Finding the capital later may be time-consuming, especially if your address has changed in the meantime.
From a Hungarian perspective, this aspect is particularly important: anyone who fails to make an active decision amid the upheaval of moving may later have to trace and transfer the capital from abroad — a slower and more cumbersome process than making a deliberate decision in advance.
What cantonal factors influence Swiss withholding tax?
Payments from the second pillar are subject to withholding tax (Quellensteuer) in Switzerland. The decisive factor is the canton in which the paying vested benefits foundation (Freizügigkeitsstiftung) has its registered office — rather than the canton in which the individual previously resided.
This is an important planning consideration: since the provider of the vested benefits account can be freely chosen before permanent emigration, the withholding tax levied on the payout can also be influenced through the provider’s registered office.
Withholding tax rates vary by canton. The dossier cites a specific example: for foundations registered in the canton of Schwyz (SZ)the note states that the maximum withholding tax rate is 4.8%.
This figure should be treated with caution. It is not a personalised savings promise, but information relating to the maximum rate in a named canton. The actual tax burden depends on the amount involved, the applicable cantonal regulations and the individual circumstances; therefore, current official cantonal information should always be relied upon.
From a Hungarian perspective, there is an additional layer: the Hungarian–Swiss double taxation agreement (Doppelbesteuerungsabkommen, DBA). This determines which state ultimately taxes the payout and provides the basis for a possible reclaim of Swiss withholding tax.
What confirmation may be required to reclaim Swiss withholding tax from Hungary?
In certain cases, withholding tax deducted in Switzerland can be reclaimed, but a specific confirmation from Hungary must be submitted for this purpose.
For the reclaim, the beneficiary must demonstrate to the Swiss tax authority (Eidgenössische Steuerverwaltung, ESTV) that the paid-out capital was declared to the Hungarian tax authority (Nemzeti Adó- és Vámhivatal, NAV) and was subject to taxation. This requirement is based on the ESTV’s 2021 circular.
The practical process is as follows:
The Swiss foundation deducts withholding tax when making the payout.
You declare the capital to NAV.
NAV confirms the declaration and that taxation has taken place.
This confirmation can then be used to initiate the reclaim of Swiss withholding tax with ESTV.
The precise form, deadlines and required content of the NAV confirmation depend on the individual circumstances, so it is advisable to begin obtaining these documents in good time. The specific applicability of the double taxation agreement for 2026 should be checked separately before submission, as agreements and administrative practice may change.
Sources
sfbvg.ch — https://sfbvg.ch/aufgaben/barauszahlung-nach-ausreise
sfbvg.ch — https://sfbvg.ch/en/tasks/cash-payment-on-departure-abroad
sfbvg.ch — https://sfbvg.ch/fileadmin/user_upload/sfbvg/SF.6_VS_Ausreise/SF-F6-01DE-DE.pdf
sfbvg.ch — https://sfbvg.ch/aufgaben/barauszahlung-nach-ausreise/online-formular-eu
aeis.ch — https://aeis.ch/en/individuals/undeliverable-vested-benefits-accounts/details
aeis.ch — https://aeis.ch/application/files/4517/6189/7269/Reglement_FZK_2026_L_e.pdf
aeis.ch — https://aeis.ch/application/files/2517/3761/6072/Barauszahlung_Ueberobligatorium_Wegzug_ins_Ausland_kleiner_20000_EN.pdf
admin.ch — https://sozialversicherungen.admin.ch/de/d/6358/download
admin.ch (ESTV) —
moneyland.ch — https://www.moneyland.ch/en/forum/withdrawal-for-leaving-switzerland-to-an-eu-country-8362
moneyland.ch — https://www.moneyland.ch/en/leaving-switzerland-important-tips
moneyland.ch — https://www.moneyland.ch/en/forum/withdrawing-pillar-2a-leaving-switzerland-6002
moneyland.ch — https://www.moneyland.ch/en/pillar-3a-foreigners-expats-switzerland-tellco
sfbvg.ch — https://sfbvg.ch/fileadmin/user_upload/sfbvg/Geschaeftsberichte/SF-GB-2023-DE.pdf
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In Brief
When moving to Hungary, the mandatory portion of the Swiss second pillar generally cannot be withdrawn as a lump sum if compulsory social insurance coverage is established in Hungary. The non-mandatory portion can usually be paid out upon permanent departure, while the mandatory portion remains in a Swiss vested benefits account; verification can be initiated no earlier than 90 days after deregistration in Switzerland and the end of employment.
Key Takeaways
- Check the total capital and mandatory portion shown on the termination benefit certificate, as these determine the expected lump-sum payment.
- Arrange the documents relating to deregistration in Switzerland, the end of gainful employment and insurance status in Hungary before submitting an application to the BVG Guarantee Fund.
- After the 90-day waiting period has elapsed, initiate the assessment of compulsory insurance coverage for the mandatory portion using the appropriate online form.
- Actively instruct how the termination benefit is to be handled so that the former pension fund does not automatically transfer the capital to the Stiftung Auffangeinrichtung BVG.
- Before payment, compare the registered offices of vested benefits foundations and the applicable withholding tax rules, as tax rates may differ by canton.
- To reclaim Swiss withholding tax, coordinate with the NAV in good time regarding proof of declaration and taxation in Hungary, then check the current ESTV requirements.
Frequently Asked Questions
Can the full amount of the Swiss second pillar be withdrawn if I move to Hungary?
Generally, no. If compulsory pension and social insurance coverage is established in Hungary, the mandatory portion cannot be paid out as a lump sum and remains in a Swiss vested benefits account. The non-mandatory portion can usually be withdrawn upon permanent departure.
What is the difference between the mandatory and non-mandatory portions?
The mandatory portion is the minimum pension savings required by law and is subject to stricter payment rules when moving to an EU/EFTA member state. The non-mandatory portion consists of savings above the statutory minimum and can generally be withdrawn as a lump sum upon permanent departure.
When can it be assessed whether I become compulsorily insured in Hungary?
The assessment can be initiated no earlier than 90 days after deregistration in Switzerland and the end of gainful employment in Switzerland. The BVG Guarantee Fund examines whether compulsory insurance coverage exists in Hungary.
What happens to the capital if I do not provide instructions regarding the termination benefit?
The capital is not lost. If no instructions are given after employment ends, the former pension fund must transfer it to the Stiftung Auffangeinrichtung BVG within six months at the latest, where a vested benefits account is opened in your name. In this case, however, you do not choose the provider or its terms in advance.
Which canton's withholding tax applies to the payment?
The decisive factor is the registered office of the paying vested benefits foundation, not the former place of residence in Switzerland. Withholding tax rates differ by canton; the article mentions a rate of up to 4.8% for foundations registered in the canton of Schwyz, which should be verified against current official information.
Can withholding tax deducted in Switzerland be reclaimed from Hungary?
In certain cases, yes. To reclaim it, proof must be provided to the Swiss tax authority that the paid-out capital was declared to the NAV and was subject to taxation. The exact form, deadline and required content of the certificate must be determined under the current procedural rules.
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