For the first time, a Swiss state authority has collected one million francs in forgotten pension fund assets. The funds belonged to individuals who had reached 100 years of age without claiming their retirement savings, which they had accumulated through salary deductions decades earlier.
This development highlights a growing issue of unclaimed pension assets in Switzerland, with a staggering six billion francs currently held in forgotten accounts.
Key Takeaways
- A state authority has claimed CHF 1 million from 201 forgotten pension accounts for the first time.
- Funds are claimed after the account holder's 100th birthday if they remain unclaimed.
- A total of CHF 6 billion in unclaimed pension assets is currently managed by a national foundation.
- Proactive steps during job changes, unemployment, and divorce can prevent funds from being lost.
A Precedent-Setting Collection
The Sicherheitsfonds BVG, a foundation that functions as a state authority, confirmed the collection in its latest business report. The law permits the state to assume ownership of these assets after a person's 100th birthday, operating on the presumption that no further claims will be made.
The report detailed that 201 individual accounts were dissolved to reach the one-million-franc total. Officials expect this trend to continue and accelerate. As more people participate in the occupational pension system and savings balances grow, the volume of forgotten funds is projected to rise.
A Growing Trend
The amount of funds being forfeited is increasing annually. For individuals born in 1924, a total of CHF 240,000 was claimed. For those born just one year later, in 1925, that figure rose to CHF 320,000.
The Six Billion Franc Holding Pattern
Before any funds are transferred to the state, they enter a long-term holding process managed by a different entity. The Auffangeinrichtung BVG, a non-profit organization with a federal mandate, serves as the primary custodian for forgotten pension assets.
According to its managing director, the foundation currently oversees approximately 950,000 accounts containing a combined total of six billion francs. These are funds that were not transferred to a new pension plan when an individual changed jobs or left the workforce.
Despite the large number, the system is effective at reconnecting people with their money. The organization successfully returns over three-quarters of these forgotten accounts to their rightful owners, often around retirement age.
How Owners Are Found
A key tool in locating account holders is a data-sharing agreement with the AHV (Old Age and Survivors' Insurance) payment office. For individuals already receiving a state pension in Switzerland, their current address can be easily retrieved, facilitating the return of their second-pillar funds.
The Path to Forfeiture
For the nearly one-quarter of cases where the owner cannot be found, a clear timeline is triggered. The Auffangeinrichtung BVG manages the funds for a maximum of ten years past the standard retirement age.
If no claim is made by the time the individual turns 75, the assets are transferred to the Sicherheitsfonds BVG. This fund's primary mission is to insure pension benefits against employer insolvency.
The Sicherheitsfonds BVG then holds the money for another 25 years. Only after the individual's 100th birthday passes without a claim does the state officially collect the funds. The money is then used to finance the fund's legal obligations.
How to Prevent Your Pension Funds from Being Forgotten
Losing track of pension assets is surprisingly common, but it is preventable. Individuals should take active measures during key life and career events to ensure their retirement savings follow them.
Taking a few simple steps can ensure your hard-earned money remains under your control.
Key Moments for Action
- When Changing Jobs: It is your responsibility to instruct your previous employer's pension fund to transfer your vested benefits to your new employer's pension fund. Do not assume this happens automatically.
- During Periods of Unemployment: If you do not start a new job immediately, your pension money cannot stay with your former employer. You must arrange for it to be transferred to a vested benefits account at a bank or insurance company, or to the Auffangeinrichtung BVG.
- After a Divorce: In a divorce settlement, pension assets are often split. If you are awarded a portion of your ex-spouse's pension but are not currently employed and contributing to a pension fund, you must have the funds transferred to a vested benefits account in your name.
By staying vigilant and ensuring proper transfers, you can safeguard your retirement assets and prevent them from becoming part of the growing pool of forgotten funds.