How can the Swiss second pillar be settled when leaving Switzerland?
When moving to the EU/EFTA, the mandatory second pillar is blocked, while the non-mandatory portion can be paid out in cash. Withholding tax, deadlines and how to trace lost assets.
Table of contents
- Can the full amount be withdrawn in cash when moving to an EU or EFTA country?
- What happens to the mandatory and extra-mandatory portions?
- What happens to the mandatory portion when moving to the EU/EFTA?
- What happens to the non-mandatory portion?
- When can the entire second pillar be paid out?
- What does this mean specifically for Hungarians returning home?
- How does withholding tax depend on the canton of the vested benefits foundation?
- How can forgotten vested benefits be traced?
- Sources
- Related Articles
Can the full amount be withdrawn in cash when moving to an EU or EFTA country?
In short: no, the mandatory portion cannot. When permanently moving to an EU or EFTA member state, the mandatory portion of the second pillar (BVG-Obligatorium) cannot be paid out in cash if you are subject to compulsory insurance in the new country for old age, disability and death.
This restriction follows from the logic of the framework governing the free movement of persons: within the EU/EFTA, mandatory pension assets serve retirement purposes and therefore cannot be freely released.
As a Hungarian citizen, you are considered an EU citizen under the Swiss legal system. In other words, when returning home to Hungary, this rule will generally apply to you, provided that you join the compulsory social insurance system in Hungary (for example, through employment or another insured status).
The key practical question is therefore not “where you are moving to”, but whether compulsory insurance exists in the new country for old age, disability and death.
What happens to the mandatory and extra-mandatory portions?
The treatment of the two portions differs significantly: the mandatory portion remains blocked, while the extra-mandatory portion may be paid out.
To explain this, it is first useful to clarify the two concepts:
Mandatory portion (BVG-Obligatorium): the statutory minimum pension assets regulated by the BVG.
Extra-mandatory portion (Überobligatorium): everything accumulated above the statutory minimum (through a higher salary, more favourable pension fund regulations or voluntary contributions).
The termination benefit (Austrittsleistung) consists of these two components. When you leave your employer’s pension fund, the amount is transferred to a vested benefits account (Freizügigkeitskonto) or vested benefits insurance policy (Freizügigkeitspolice).
What happens to the mandatory portion when moving to the EU/EFTA?
Where compulsory insurance applies in the new country, the mandatory portion is transferred to a Swiss vested benefits account or vested benefits policy is transferred there, and the amount remains blocked until Swiss retirement age.
This means that the money is not lost, but it is not immediately accessible either. The assets remain in Switzerland, managed by a vested benefits foundation (Freizügigkeitsstiftung), until you meet the conditions for payment.
What happens to the non-mandatory portion?
The non-mandatory portion may also be withdrawn in cash without restriction (Barauszahlung der Freizügigkeitsleistung) when moving to an EU/EFTA member state.
In other words, you can access this amount even when returning to Hungary, regardless of whether you join the Hungarian compulsory social insurance system. In practice, it is therefore important for the pension fund or vested benefits foundation to clearly separate the two components—the payment applies only to the non-mandatory portion.
When can the entire second pillar be paid out?
The full amount—including the mandatory portion—can be withdrawn in cash if you move to a non-EU/EFTA member state or if it can be demonstrated that, in the new country, you are not subject to compulsory social insurance for old age, disability and death.
Some typical cases:
Destination country / situation | Mandatory portion | Non-mandatory portion |
|---|---|---|
EU/EFTA + compulsory insurance in the new country | Blocked in a vested benefits account | Can be withdrawn in cash |
EU/EFTA, but no compulsory insurance (documented) | Can be withdrawn in cash | Can be withdrawn in cash |
Non-EU/EFTA country | Can be withdrawn in cash | Can be withdrawn in cash |
The fact that there is no compulsory insurance must be substantiated. The specific method (which document, from which authority) should be verified for the individual case with the relevant vested benefits foundation or with the Stiftung Auffangeinrichtung BVG.
According to the 2026 information, it is possible to receive the full amount as a cash payment; the detailed conditions are always set out in the current publication of the relevant institution.
What does this mean specifically for Hungarians returning home?
If you return to Hungary and take up employment there or otherwise become subject to compulsory social insurance, you can generally receive only the portion above the mandatory amount in cash, while the mandatory portion is locked.
This return-home scenario is one of the most important—and most frequently misunderstood—elements of financial planning. Many people plan their return believing that all accumulated assets will be released immediately, whereas within the EU, converting the mandatory portion into cash is restricted.
Hungarian–Swiss pension coordination (coordination between the Hungarian social insurance system and the Swiss AHV/AVS system) is a separate topic concerning the first pillar, which is independent of the second pillar; the two must not be confused.
How does withholding tax depend on the canton of the vested benefits foundation?
If you do not have a Swiss address at the time of payment, withholding tax (Quellensteuer) is deducted in Switzerland from the capital paid out. The rate is determined not by your former Swiss place of residence, but by the canton in which the vested benefits foundation is based.
This rule is strategically significant: since you can choose your vested benefits account freely, you can also indirectly influence the canton in which the tax burden arises by deciding which foundation the assets are transferred to.
According to finpension's comparison, The rate is lowest in the canton of Schwyz: including federal, cantonal and municipal taxes, it is no more than 4.8%. This is the maximum applicable in Schwyz — the tax burden may be higher in other cantons.
A few important points about withholding tax:
Withholding tax applies to the entire capital amount paid out, not just part of it.
The specific tax burden varies by canton, so it is advisable to check the canton of the institution’s registered office before opening an account.
The level of taxation may also depend on individual circumstances, so it is advisable to verify the exact amount with the relevant foundation or the Federal Tax Administration (Eidgenössische Steuerverwaltung / ESTV).
The Hungarian–Swiss double taxation agreement may affect how withholding tax deducted in Switzerland is credited in Hungary or whether it can be reclaimed. This requires an individual assessment and is beyond the scope of this article — consulting a tax advisor is recommended in specific cases.
How can forgotten vested benefits be traced?
Forgotten second-pillar assets or vested benefits can be Zentralstelle 2. Säule (the central office for the second pillar) free of charge located.
This is a more common issue than you might think: if someone has worked for several employers, they may have multiple vested benefits accounts, and changes of address may cause some institutions to lose track of them. The search is carried out through the central office operated by Stiftung Sicherheitsfonds BVG (Security Fund).
The following identifiers are required for the search:
AHV number (the Swiss social security identification number),
name,
date of birth.
Important deadline: assets transferred to the Security Fund (Sicherheitsfonds BVG) as “unclaimed” assets, the entitled person until their 100th birthday can still be claimed. After that, the assets permanently become the property of the Foundation.
In individual cases, the search process, the documents to be submitted and the conditions for payment must be verified directly with the institution concerned or with the Zentralstelle 2. Säule.
Sources
aeis.ch — https://aeis.ch/application/files/2517/6639/1778/2026-Infobroschuere-FZK-DE-Final.pdf
prosperita.ch — https://www.prosperita.ch/de/versicherte/ratgeber-versicherte/wegzug-ins-ausland
presv.ch — https://www.presv.ch/Leistungen/Austritt-eines-Versicherten
finpension.ch — https://finpension.ch/de/wissen/vergleich-quellensteuer/
admin.ch — https://www.eda.admin.ch/countries/netherlands/de/home/dienstleistungen/sozialversicherung/ahv-iv/berufliche-vorsorge.html
vorsorgeforum.ch — https://www.vorsorgeforum.ch/bvg-aktuell/kategorie/institutionen
sfbvg.ch — https://sfbvg.ch/aufgaben/suche-nach-guthaben
uwp.ch — https://www.uwp.ch/FAQ
moneyland.ch — https://www.moneyland.ch/de/forum/freizuegigkeitskonto-verlassen-der-schweiz-2208
admin.ch — https://www.eda.admin.ch/de/ruhestand-im-ausland-schweizer-staatsangehoerige-im-ausland
zh.ch — https://www.zh.ch/de/steuern-finanzen/steuern/quellensteuer/Quellensteuerpflichtige-Personen.html
Related Articles
In Brief
When moving to an EU or EFTA country, including Hungary, the mandatory portion of the Swiss second pillar generally cannot be withdrawn in cash if compulsory old-age, disability and survivors’ insurance applies in the new country. However, the non-mandatory portion can be paid out. Swiss withholding tax may be deducted from the payment; its rate depends on the canton in which the vested benefits foundation is based.
Key Takeaways
- Before relocating, establish whether compulsory old-age, disability and survivors’ insurance applies in the destination country.
- Ask the pension fund or foundation for a separate statement of the mandatory and non-mandatory portions of the termination benefit.
- If you are employed in Hungary or otherwise subject to compulsory social insurance there, do not plan on withdrawing the mandatory portion in cash.
- If you can document that you are not subject to compulsory insurance, check the documents required for payment with the relevant foundation or Stiftung Auffangeinrichtung BVG.
- When choosing a vested benefits account, review the withholding-tax burden in the canton where the foundation is based.
- Search free of charge for forgotten second-pillar assets using your AHV number, name and date of birth through the Zentralstelle 2. Säule system.
Frequently Asked Questions
Can the entire Swiss second pillar be withdrawn in cash when moving to Hungary?
Generally not, if you become subject to compulsory old-age, disability and survivors’ insurance in Hungary. In that case, the mandatory BVG portion remains blocked in a Swiss vested benefits account or vested benefits insurance policy, but the non-mandatory portion can be paid out.
What is the difference between the mandatory and non-mandatory portions?
The mandatory portion is the minimum pension capital required by law and regulated by BVG. The non-mandatory portion is the amount accumulated above the statutory minimum, for example through a higher salary, more favourable pension-fund rules or voluntary contributions.
When can the mandatory portion also be withdrawn in cash?
The full amount can be paid out in cash if the move is to a country outside the EU or EFTA, or if it can be demonstrated that the new country does not impose compulsory insurance for old age, disability and death. Exemption from insurance must be documented with appropriate evidence.
What happens to the mandatory portion if it cannot be withdrawn immediately?
The mandatory portion is transferred to a Swiss vested benefits account or vested benefits insurance policy and remains blocked until Swiss retirement age. The money is not lost; it remains managed by a vested benefits foundation.
How much withholding tax is deducted from the payment?
Swiss withholding tax is deducted from capital paid out to a person who does not have a Swiss residential address. The tax rate is determined by the canton where the vested benefits foundation is based; according to the article, in Schwyz it can be up to 4.8%, including federal, cantonal and municipal taxes.
How can forgotten Swiss vested benefits be found?
Forgotten second-pillar or vested benefits assets can be traced free of charge with the help of Zentralstelle 2. Säule. The search requires the AHV number, name and date of birth.
Until when can unclaimed vested benefits assets be claimed?
Unclaimed assets transferred to Stiftung Sicherheitsfonds BVG can be claimed until the beneficiary’s 100th birthday. After that, the assets permanently become the property of the Fund.
Related guides
- How can you preserve your Swiss pension capital when leaving?
- How should the Swiss second pillar be handled for tax and divorce purposes?