A Swiss state authority has, for the first time, collected one million Swiss francs in forgotten pension fund assets. This information comes from the annual report of the BVG Security Fund. These funds were originally paid by employees decades ago through salary deductions. Many individuals then forgot about these savings.
Under Swiss law, once a person reaches their 100th birthday, it is assumed they will no longer claim these funds. At this point, the state agency collects the money. This marks a significant milestone in the management of unclaimed pension assets in Switzerland.
Key Takeaways
- Swiss state agency collected one million francs in forgotten pension funds.
- Funds are collected after the beneficiary's 100th birthday.
- The BVG Security Fund expects a continuous increase in forgotten assets.
- The BVG Catching Institution currently manages six billion francs in forgotten funds across 950,000 accounts.
- Most forgotten funds are eventually reunited with their owners, but nearly one quarter remain unclaimed.
Rising Trend in Unclaimed Assets
The BVG Security Fund confirmed that 201 forgotten pension accounts have been finalized and collected. The managing director of the fund stated that they anticipate a steady increase in these cases going forward. This trend is driven by two main factors: a growing number of people are insured under the occupational pension scheme, and the total amount of saved assets is also increasing.
This means that for individuals born in 1924, forgotten pension funds amounted to 240,000 Swiss francs. For those born in 1925, this figure rose to 320,000 Swiss francs. The BVG Security Fund operates as a foundation but is legally considered a state authority.
Key Statistic
For the birth year 1925, forgotten pension funds totaled 320,000 Swiss francs, a significant increase from the 240,000 francs for the 1924 cohort.
The Role of the Catching Institution
Before the state can claim these forgotten funds, efforts are made to contact the beneficiaries. Many people have indeed forgotten about their pension assets. These funds initially go to a different foundation before being transferred to the BVG Security Fund.
This initial foundation, responsible for forgotten occupational pension assets, is known as the BVG Catching Institution. It currently manages approximately 950,000 accounts containing forgotten pension money, totaling an estimated six billion Swiss francs. This figure was recently shared by the CEO of this non-profit organization, which operates under a federal mandate, in a publication by the Federal Social Insurance Office.
"More than three-quarters of the forgotten accounts are reunited with their rightful owners upon reaching retirement age," stated the CEO of the BVG Catching Institution.
This success rate is partly due to a system that queries addresses from the AHV (Old-Age and Survivors' Insurance) disbursement office. For individuals already receiving an old-age pension from the first pillar (AHV) in Switzerland, their address can often be identified through this method.
When Funds Are Permanently Lost
Despite these efforts, in nearly one quarter of cases, the deposited money remains unclaimed. The rightful beneficiary cannot be located. In such situations, the BVG Catching Institution manages the assets for a maximum of ten years after the individual's regular retirement age.
If no one claims the funds by the time the person reaches 75 years of age, the money is transferred to the BVG Security Fund. The primary purpose of this fund is to secure pension assets in the event of insolvency. The Security Fund then holds the money until the person's 100th birthday, at which point it is finally collected.
Legal Framework
The legal framework assumes that after a person's 100th birthday, they are unlikely to claim pension funds. This allows the BVG Security Fund to use the money to finance its statutory duties, which include safeguarding other pension assets.
How to Prevent Losing Pension Funds
It is important for individuals to actively manage their pension assets to prevent them from becoming forgotten. Several key situations require attention:
Changing Jobs
- When you change employers, you must ensure that your second pillar pension funds are transferred from your old pension fund to your new one. This transfer is not always automatic.
- Action: Contact both your old and new pension funds to confirm the transfer.
During Unemployment
- If you do not immediately start a new job, your pension assets should be transferred. The funds should go to a vested benefits institution (Freizügigkeitsstiftung) or to the BVG Catching Institution.
- Action: Arrange for the transfer of your funds to a suitable institution to keep them active.
After Divorce
- In the event of a divorce, if you are not affiliated with a pension fund, the money you are entitled to from your ex-spouse's pension fund must be transferred. This transfer should go to a vested benefits institution or the BVG Catching Institution.
- Key Difference: Only with the BVG Catching Institution can you receive these funds as a pension upon retirement. Vested benefits institutions typically disburse the capital as a lump sum.
- Action: Understand the options for your share of pension assets post-divorce and choose the best fit for your retirement planning.
According to the BVG Security Fund's annual report, these measures are vital to ensure individuals retain access to their hard-earned retirement savings. The increasing amount of forgotten funds highlights the need for greater awareness and proactive management among beneficiaries.
The Federal Social Insurance Office continues to publish information regarding contact-less vested benefits accounts, emphasizing the scale of the issue. By following these guidelines, individuals can help prevent their pension funds from becoming part of the growing pool of unclaimed assets.