Vested benefits account payout with a large balance
A vested benefits account can be paid out from 60, and the choices made on leaving determine how the payout can be staggered around a pension fund lump sum.
Anyone leaving a pension fund with a large balance decides at that moment how flexible the later payout will be. Splitting the balance across two vested benefits institutions is as a rule only possible on leaving. It determines whether the withdrawal between 60 and 65 can be spread over two tax years.
A payout from a vested benefits account is the withdrawal of the pension capital that sits in a vested benefits account or a vested benefits securities account after leaving a pension fund. It is possible no earlier than five years before the AHV (Old Age and Survivors’ Insurance, OASI) reference age, meaning from age 60, and becomes payable at 65. What is paid out is a lump sum, taxed separately from other income.
Everon offers vested benefits solutions as an account and as a securities account; the account and the securities account are opened by its partner foundation, Liberty: vested benefits overview.
Key points at a glance
- Withdrawal: From 60 at the earliest, payable at 65. A deferral to 70 requires proof of continued employment (Art. 16 FZV). If you reach the reference age between 2024 and 2029, you can defer without proof until the end of 2029, but no more than five years beyond the reference age (transitional provision of the FZV for the AHV 21 reform).
- Splitting: The pension fund transfers the termination benefit to two vested benefits institutions at most (Art. 12 FZV). An account can as a rule no longer be split afterwards.
- Interest: 75 of 86 vested benefits accounts currently pay no more than 0.10 percent (Moneyland, query of 5 October 2026). For comparison, the BVG minimum interest rate for the mandatory part in the pension fund is at least 1.25 percent in 2026.
- Tax: For a single person, a withdrawal of CHF 1,000,000 in one year costs CHF 109,542 in tax in the city of Zurich. If the same amount is taken in two withdrawals of CHF 500,000 in two years, the total is CHF 70,136 (tax calculator of the Swiss Federal Tax Administration, ESTV, tax year 2026).
- Buy-in: Vested benefits that did not have to be transferred to the pension fund reduce the possible pension fund buy-in by that amount (Art. 60a para. 3 BVV 2).
When can a vested benefits account be paid out?
The ordinary payout is possible no earlier than five years before the AHV reference age, meaning from age 60. At the reference age of 65, the balance becomes payable. If you can prove continued employment, you can defer the withdrawal by five years at most, to age 70 (Art. 16 of the Vested Benefits Ordinance, FZV). It is paid out as a lump sum; only the pension fund pays a pension.
Under the AHV 21 reform, the reference age for women rises step by step to 65. For the 1961 to 1963 birth cohorts it lies between 64 and 65, and from the 1964 cohort it is 65, as for men. The withdrawal window shifts accordingly. A transitional rule applies to people who reach the reference age between 2024 and 2029. These persons can defer the withdrawal without employment until 31 December 2029 at the latest, but no more than five years beyond the reference age. From 2030, proof of employment is required.
If you are married or in a registered partnership, the payout needs the written consent of the spouse or partner (Art. 16 para. 3 FZV). An individual vested benefits account is, as a rule, paid out only as a whole. Apart from an early withdrawal for residential property, the foundations as a rule do not provide for partial withdrawals.
When is an early payout possible?
Before 60, a payout is permitted only in cases set out by law. For a cash payout, the same grounds apply as for the pension fund: Art. 14 FZV declares Art. 5 FZG applicable by analogy. For the vested benefits account, a full disability pension is an additional ground (Art. 16 para. 2 FZV).
- Leaving Switzerland for good: On a move to an EU or EFTA state, the mandatory part usually stays blocked as long as compulsory insurance for old age, death and invalidity applies there (Art. 25f FZG). The non-mandatory part can usually be paid out. On a move to a country outside the EU and EFTA, the entire balance is usually paid out.
- Self-employment: If mandatory occupational pension provision no longer applies.
- Full disability pension: From Swiss Disability Insurance (IV), unless the disability risk is separately insured.
- Owner-occupied residential property: Early withdrawal is possible (Art. 30c BVG). Purposes, deadlines and minimum amounts are set out in the Ordinance on the Promotion of Home Ownership Using Occupational Pension Funds (WEFV).
On death, the order of beneficiaries under Art. 15 FZV applies. The balance does not form part of the estate and passes in this order:
- the survivors within the meaning of the BVG, meaning surviving spouses, registered partners and orphans
- persons substantially supported by the deceased, or persons who lived with the deceased without interruption for the last five years or who must provide for joint children
- the other children, the parents or the siblings
- the other statutory heirs
The contract with the foundation can specify the entitlements in more detail and extend the first group to persons from the second (Art. 15 para. 2 FZV).
What is decided on leaving with a large balance?
On leaving the pension fund, you decide whether the balance goes to one or two vested benefits institutions and in what form it is invested. Art. 12 FZV provides for the split when the previous pension fund makes the transfer. The foundations as a rule do not provide for splitting an existing account afterwards. The foundation itself can be changed later.
If you do nothing, the decision is left to the pension fund. The fund transfers the balance to the Stiftung Auffangeinrichtung BVG, the substitute occupational benefit institution, no earlier than six months and no later than two years after leaving (Art. 4 FZG). The Auffangeinrichtung invests conservatively and offers no securities solution.
Vested benefits accounts carry no minimum interest rate. In Moneyland’s comparison, 75 of 86 accounts pay no more than 0.10 percent; the highest offer is 0.5 percent (query of 5 October 2026). The BVG minimum interest rate for the mandatory part in the pension fund, at least 1.25 percent in 2026, serves as a point of comparison. With CHF 2,000,000 and an interest rate of no more than 0.10 percent, the difference from the minimum rate is CHF 23,000 to 25,000 a year.
If the balance comes from a 1e pension plan, the pension fund may hand over the effective value at the time of leaving, in derogation from Art. 15 and 17 FZG (Art. 19a FZG). A price decline shortly before leaving is then borne by the insured person.
What does splitting the balance between two vested benefits institutions achieve?
Two vested benefits institutions allow two withdrawals in two different tax years. Because an individual account is, as a rule, paid out only as a whole, the vested benefits can be staggered mainly through this split. It must be requested on leaving.
The two parts need not be the same size. They can also be invested differently, each part according to its own withdrawal date. Each of the two accounts can later be transferred as a whole to another foundation (Art. 12 para. 2 FZV).
Account or securities solution: what does the choice depend on?
An account is not subject to price fluctuations but currently pays hardly any interest. A securities solution moves with the markets and is designed for an investment horizon of three to five years or more. How long the money stays invested depends on when it is withdrawn or has to flow into a new pension fund.
If you re-enter a pension fund before the withdrawal, the balance must be paid into it (Art. 4 FZG). Securities are sold for this, and if prices have fallen, only the lower value is transferred. If the balance exceeds the amount needed for the full regulatory benefits, the excess can remain in a vested benefits solution. Where a new job with a pension fund is foreseeable, the investment horizon is correspondingly short.
For a securities solution, the foundation must point out the risks explicitly. Investments follow the investment rules of the BVV 2 (Art. 19a FZV). Under these rules, equities may in principle account for up to 50 percent of the balance. Foundations also offer strategies with higher equity shares of up to 100 percent if the insured person chooses them and the insured person’s risk capacity is documented. The higher the equity share, the more the value fluctuates, and at the time of withdrawal it may be below the amount paid in. In assessing risk capacity, a further vested benefits account of the same person held as pure savings may be taken into account (Art. 19a para. 2 FZV).
The withdrawal date can be chosen freely between 60 and 65. A deferral beyond the reference age requires proof of employment from 2030 onwards. If prices fall shortly before the planned withdrawal, an account can also be withdrawn later up to the reference age, and beyond that from 2030 only with employment.
How can the withdrawal be staggered?
The tax authorities add together lump-sum benefits from the pension fund, vested benefits and Pillar 3a that are withdrawn in the same year. For married couples, the withdrawals of both partners count. Because the rates are progressive, spreading large withdrawals over several tax years lowers the total burden. For vested benefits, the window runs from 60 to 65.
An example from the tax comparison across all 26 cantonal capitals: a single person in the city of Zurich pays CHF 109,542 in tax on CHF 1,000,000 in one year. Spread over two years with CHF 500,000 each, it is CHF 35,068 twice, CHF 70,136 in total (ESTV tax calculator, tax year 2026, without other lump-sum benefits in those years). The difference is CHF 39,406.
A married couple with vested benefits, Pillar 3a accounts and pension fund capital quickly ends up with six or more withdrawals, which can be spread over the years between 60 and retirement. How large the advantage of spreading is depends on the canton of residence, the municipality and the amounts.
How do vested benefits interact with a lump-sum withdrawal from the pension fund?
Vested benefits and the pension fund interact on tax in the year of withdrawal, on the possible buy-in and on the blocking period after a buy-in. As a rule, the year in which the pension fund capital is withdrawn carries the most weight, because the largest amount arises there.
- Tax: A vested benefits withdrawal in the same year as the pension fund lump sum is added to it. A vested benefits account can be withdrawn in another year.
- Buy-in: Vested benefits that did not have to be transferred to the pension fund reduce the maximum amount for a buy-in by that amount (Art. 60a para. 3 BVV 2). If a buy-in is planned, this balance therefore counts.
- Blocking period: Benefits from a buy-in may not be withdrawn as a lump sum within three years (Art. 79b para. 3 BVG).
Whether the pension fund balance is drawn as a pension or as a lump sum is a separate decision (see lump sum or pension). Vested benefits can also be paid into an existing pension fund. If benefits are drawn as a pension, this increases the later pension. More on buy-ins and blocking periods is in the article on voluntary pension fund buy-ins.
How is the payout taxed?
The payout from a vested benefits account is taxed separately from other income. At federal level, one fifth of the ordinary rate applies (Art. 38 DBG). Cantons and municipalities also tax the benefit separately (Art. 11 para. 3 StHG), at their own rates. What matters is the place of residence at the time of withdrawal. The burden differs markedly between municipalities.
As long as the money is held in the vested benefits solution, neither wealth tax nor income tax on interest and dividends is levied. After the withdrawal, the capital is subject to ordinary wealth tax. The returns are taxed as income from then on.
Frequently asked questions about vested benefits account payouts
When can I request a payout from my vested benefits account?
No earlier than five years before the AHV (Old Age and Survivors’ Insurance, OASI) reference age, so usually from age 60. The balance becomes payable at the reference age, usually 65. If you can prove continued employment, you can defer the withdrawal to age 70 at the latest (Art. 16 FZV). If you reach the reference age between 2024 and 2029, you can also defer until the end of 2029 without employment, but no more than five years beyond the reference age. The payout is made as a lump sum. If you are married or in a registered partnership, the written consent of the spouse or partner is required.
When is an early payout from a vested benefits account possible?
Only in cases set out by law. For a cash payout, the same grounds apply as for the pension fund (Art. 14 FZV, Art. 5 FZG), for large balances mainly leaving Switzerland for good and taking up self-employment without mandatory occupational pension provision. A full disability pension (Art. 16 para. 2 FZV) and an early withdrawal for owner-occupied residential property (Art. 30c BVG) come on top. On a move to an EU or EFTA state, the mandatory part usually stays blocked.
Can I split my vested benefits across two accounts?
Yes, but as a rule only on leaving the pension fund. The pension fund may transfer the termination benefit to two vested benefits institutions at most (Art. 12 FZV). An existing account can as a rule no longer be split later and is paid out only as a whole. Two accounts at two foundations therefore allow two withdrawals in two tax years and two different investment strategies.
How is the payout from a vested benefits account taxed?
Separately from other income: at federal level at one fifth of the ordinary rate (Art. 38 DBG). Cantons and municipalities also tax the benefit separately (Art. 11 para. 3 StHG), at their own rates. Lump-sum benefits from the pension fund, vested benefits and Pillar 3a that are withdrawn in the same year are added together, and for married couples so are the withdrawals of both partners. What matters is the place of residence at the time of withdrawal.
What happens to my vested benefits when I join a new pension fund?
They must be paid into the new pension fund (Art. 4 FZG). If they are held in a securities solution, the securities are sold for this, and if prices have fallen, only the lower value is transferred. If the balance exceeds the amount needed for the full regulatory benefits, the excess can remain in a vested benefits solution. That excess reduces the maximum amount for a later buy-in by the same amount (Art. 60a para. 3 BVV 2).
Sources
- Federal Act on Vested Benefits in Occupational Old Age, Survivors’ and Invalidity Pension Plans (FZG, SR 831.42), Art. 4, 5, 19a and 25f
- Vested Benefits Ordinance (FZV, SR 831.425), Art. 12, 14, 15, 16 and 19a and the transitional provision to the amendment of 30 August 2023
- Federal Act on Occupational Old Age, Survivors’ and Invalidity Pension Provision (BVG, SR 831.40), Art. 30c and 79b
- Ordinance on Occupational Old Age, Survivors’ and Invalidity Pension Provision (BVV 2, SR 831.441.1), Art. 60a on buy-ins
- Federal Act on Direct Federal Taxation (DBG, SR 642.11), Art. 38
- Federal Act on the Harmonisation of Direct Taxation at Cantonal and Communal Levels (StHG, SR 642.14), Art. 11 para. 3
- Ordinance on the Promotion of Home Ownership Using Occupational Pension Funds (WEFV, SR 831.411)
- Federal Social Insurance Office (BSV): AHV 21 reform, reference age and withdrawal of vested benefits
- Swiss Federal Tax Administration (ESTV): tax calculator, tax year 2026
- Moneyland: vested benefits account comparison, query of 5 October 2026 for CHF 2,000,000, all of Switzerland
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This article is for general information purposes only and does not constitute investment, legal or tax advice, nor an offer to buy or sell financial instruments. Everon AG is a wealth manager licensed by FINMA under FinIA. Past performance is not a reliable indicator of future returns.
