After your employment relationship has ended, you also leave the pension fund. If you start a new job, your saved pension fund assets are transferred to the new pension fund. Otherwise, you have to temporarily park your pension assets in a vested benefits account if you have not yet reached retirement age.
Benefit from tax exemptions with vested benefits
Your retirement assets are safe in your vested benefits account if you give up or take a break from employment. Your retirement assets as well as interest and investment income are not subject to wealth and income tax until you withdraw benefits. Your pension assets can be withdrawn five years before statutory retirement age at the earliest and a maximum of five years thereafter, with just a few exceptions.
Split your pension fund assets
Normally, you can only withdraw the entire sum of vested benefits funds. You cannot make partial withdrawals. That's why it may be advisable to divide your termination benefits from your current pension fund between two vesting institutions. This gives you the flexibility you want for staggered withdrawals upon retirement, and you can optimize your tax burden. Notify your current pension fund early that you would like to split your termination benefits.
By the way: Pension funds invest your retirement savings in securities. With our UBS Vitainvest retirement funds, you can continue to invest your pillar 2 retirement assets at your vesting institution. That way you participate in the performance of financial markets and thus benefit from enhanced potential earnings over the long term.