When you leave a Swiss employer, your Pillar 2 assets do not just sit there. They must move into a vested benefits account known in German as a Freizügigkeitskonto. For US citizens and green-card holders, that account becomes an FBAR-reportable foreign account the moment it opens. The mechanics are straightforward once you know the sequence, and you have one early decision that matters more than it looks.
What happens the day you leave
Your employer's pension fund will send you a termination statement and ask where to transfer your vested benefits. If you have a new job in Switzerland immediately, your Pillar 2 usually transfers to the new employer's pension fund. If there is any gap, or you leave the country, you will need a Freizügigkeitskonto — a preservation account that holds these assets until you retire, withdraw them under the rules, or transfer them elsewhere.
The two-account decision happens now
You can split your vested benefits into two separate accounts when you first make the transfer. This can be useful for withdrawal flexibility later, because the mandatory and non-mandatory parts of your Pillar 2 are treated differently when you leave Switzerland. The split must happen at the initial transfer — you cannot retroactively create a second account later.
FBAR reporting: the account counts from day one
FBAR is a US Treasury report that lists foreign financial accounts if the aggregate highest balances ever exceed $10,000 at any point in a calendar year. A Freizügigkeitskonto is a foreign account under these rules. The key points: the threshold is aggregate across all your foreign accounts, it uses the highest balance during the year rather than the year-end balance, and the filing is due April 15 of the following year with an automatic extension to October 15.
$10,000
Aggregate threshold for FBAR filing across all foreign accounts
6 months
Time before automatic transfer to Auffangeinrichtung BVG if you do not choose an account
FBAR is not the same as Form 8938
US persons may also have a Form 8938 filing requirement for certain foreign financial assets, including vested benefits accounts. The thresholds and filing deadlines are separate from FBAR. If you have a Freizügigkeitskonto and other assets abroad, review both with a cross-border tax preparer.
The six-month fallback: Auffangeinrichtung BVG
If you do not give your pension fund a destination within six months after leaving, the money is automatically transferred to the Auffangeinrichtung BVG, the substitute institution. This is not a penalty, but it means you lose the chance to structure the split from the start and may need to move the assets later. For US persons, the FBAR obligation exists regardless of which Swiss institution holds the account.
Withdrawal rules and why two accounts can help
Under Swiss rules, if you leave Switzerland for a non-EU/EFTA country, you may be able to withdraw the full Pillar 2 amount. If you move to another EU/EFTA country, you generally can only withdraw the Überobligatorium — the portion above the mandatory minimum. This is where the two-account strategy gets practical: separating mandatory and non-mandatory amounts at the outset can make a later withdrawal cleaner. Keep in mind that US tax treatment of any withdrawal is a separate question, and this depends on your personal situation.
Separate the Überobligatorium if you plan to leave
If a move to the United States or another non-EU/EFTA country is likely, keeping the Überobligatorium in a second account from the start can simplify the Swiss-side withdrawal paperwork later. It does not change your US tax obligation, but it can reduce confusion when the time comes.
One account is still fine for many people
Splitting into two accounts is optional. If you are not planning to leave Switzerland, or you prefer simplicity, one well-run Freizügigkeitskonto is perfectly acceptable. The important thing is to make an intentional choice before the six-month clock runs out.
Your practical action list
- Confirm with your employer's pension fund what your Pillar 2 balance is and when the termination takes effect.
- Decide whether you want one or two vested benefits accounts; if two, set both up at the same time and instruct the transfer accordingly.
- Open the account with an institution that accepts US clients, or work with a specialized advisor who can coordinate it.
- Record the opening date, account number, and balance for each account for FBAR purposes.
- If you are already past the six-month mark, check whether your money went to the Auffangeinrichtung BVG and move it if desired.
The vested benefits account is a normal part of leaving a Swiss employer. For US persons, the main difference is remembering that it exists for FBAR purposes from day one and that the one decision you cannot postpone is whether to split it into two accounts. Once those are handled, you can move on knowing both systems are covered.