Legal basis

The possibilities of cash payment are set out in the Federal law on vested benefits in occupational, retirement, survivors and disability benefit schemes (vested benefits act; FZG):

Art. 5 cash payment

1. Insured persons may apply for cash payment of the leaving benefit if:

a. They leave Switzerland permanently; article 25 f is however reserved;

b. They take up a self-employed activity and are no longer subject to compulsory occupational benefit insurance; or

c. The leaving benefit amounts to less than their annual contribution.

2. In the case of married claimants, the cash payment is permitted only if the spouse gives his or her written consent.

3. If the consent cannot be obtained, or if it is withheld without a substantial reason, the matter may be referred to the court.

Art. 25 f limitation of cash payments to the Member States of the European Community, Iceland, Liechtenstein and Norway

1. Insured persons may not apply for the cash payment under Article 5, para. 1, letter a of the retirement credit balance acquired until the date on which they leave the occupational benefit scheme under article 15 LOB if:

a. They must continue to have compulsory insurance against the risks of retirement, death and disability under the legal provisions of a Member State of the European Community;

b. They must continue to hold compulsory insurance against the risks of retirement, death and disability under the statutory provisions of Iceland or Norway;

c. They live in Liechtenstein.

2. Para 1 letter a takes effect five years after the entry into force of the agreement on freedom on movement.

3. Para 1 letter b takes effect five years after the entry into force of the revised EFTA agreement.



Cash payment on departure abroad

The most important impact of EU law on occupational benefits concerns the restriction placed on cash payment on departure abroad. Under EU law, a refund of contributions when the compulsory insurance requirement ceases in a particular country is not permitted if the person remains liable for compulsory insurance in a different EU Member State.

By application of this principle, the possibility of cash payment of credit balances from occupational benefit schemes has been limited under Article 5 of the vested benefits law with reference to the agreement on the freedom of movement of persons; an appropriate provision has been added to Article 25f of the vested benefits law. The limitation came into force five years after the enactment of the Agreement on the Free Movement of Persons, on 1 June 2007 (for Bulgaria and Romania on 1 June 2009; for Croatia on 1 January 2017). It was also adopted for the EFTA countries.

Cash payment of the occupational benefit credit balance is no longer possible on departure abroad under the following conditions:

  • Departure takes place after 31.5.2007 and
  • the cash payment relates to a credit balance from the statutory minimum benefits (LOB) and
  • the insured person moves to an EU or EFTA country and
  • the person concerned must have compulsory state insurance for retirement, disability and survivors' benefits in the new country.

A person taking up self-employment activities in a member state of the EU or EFTA is not entitled to refund of compulsory savings balances if the person is still required to have compulsory pension, disability and survivors' benefit insurance in the member state concerned.

If the occupational benefit credit balance of a particular person comprises benefit claims under both compulsory and non-compulsory schemes, only the benefit from the compulsory scheme can no longer be paid out in cash. If any one of the above points is not satisfied, the entire credit balance can still be drawn in cash on departure abroad.

Cash payment is not allowed if an insured person leaves Switzerland permanently to live in Liechtenstein .

If the cash payment is not possible, the credit balance will be retained in Switzerland on a blocked account (vested benefits account or vested benefits policy). On reaching ordinary retirement age or no less than five years before ordinary retirement age, the credit balance is paid out to the person concerned. No transfer of the credit balance from an occupational benefit scheme to the foreign social insurance scheme will be made.