Documents to be submitted when paying out a pillar 3a account balance

Topic: Account / savings book Case number: 2024/02

The client had reached the age of 60 and therefore met the requirements for a regular withdrawal of his pillar 3a account savings. He contacted the bank to find out what documents he needed to submit. The bank asked him to complete a withdrawal application form and a to provide a confirmation of residence. He sent the requested documents to the bank and unfortunately heard nothing more from them. When he contacted the bank again, it requested, in addition to the documents he had submitted, a documented proof of marital status. The client was not prepared to provide proof of marital status and explained to the bank that it had not asked for such proof when he made his initial enquiry. His complaint remained unanswered, so he referred the case to the Ombudsman. The Ombudsman asked the bank to respond to the client’s complaint. In its reply to the him, the bank apologised and explained that the spouse’s consent was only required in certain cases of early withdrawal of pillar 3a account balances, but not for regular withdrawals on reaching retirement age. It waived the proof of marital status and, covered , as a sign of concession, the costs for the confirmation of residence.

Complaints are occasionally submitted to the Ombudsman in connection with the documents required by the banks’ pension foundations for the payment of pillar 3a account balances. In most cases, this concerns the requirement to submit a confirmation of residence, which usually involves a small administrative fee. This requirement can be perceived as particularly objectionable by clients who have never changed place of residence as once notified to the bank and who may even still have a mortgage granted by the bank on their residential property. If such clients complain to the Ombudsman, many pension foundations are accommodating, even though they have usually included in the pension agreements the requirement to submit a confirmation of residence when withdrawing pension assets.

The reason for this requirement lies in a provision of the Withholding Tax Act, which bears liability risks for pension foundations. The Withholding Tax Act stipulates that a pension foundation must report pillar 3a capital withdrawals to the Swiss Federal Tax Administration. The Federal Tax Administration forwards these reports to the tax authorities at the recipient’s place of residence. If the beneficiary is not (or no longer) resident in Switzerland, the pension foundation must deduct withholding tax at the rate applicable at the pension foundation’s registered office. If it fails to do so, the pension foundation is liable to the tax authorities for the corresponding amount. For this reason, the pension foundations clarify the domicile of the account holder on the basis of a current official document when a withdrawal takes place.

Experience has shown that bank clients may fail to notify the bank or its pension foundation of a change of residence. In addition, it is not uncommon for clients to change their place of residence to a place abroad when they retire, even if before they have not changed place of residence for many years or decades. In the Ombudsman’s opinion, the requirement for pension fund members to submit a confirmation of residence when withdrawing capital from pillar 3a can therefore not be considered a misconduct on the part of the banks’ pension foundations. The fact that the (low) costs for this must be borne by the account holder, similar to the costs of an official identity document, which is required to verify legitimisation, is probably not objectionable.

The present case was somewhat different. The bank, as the representative of the pension foundation, assumed from the client’s enquiry that his wife’s consent to withdraw the capital was required . It therefore wanted to clarify whether he was married and, if so, request a declaration of consent from his wife. However, as the pension foundation correctly stated in its response to the complaint, the spouse’s declaration of consent is only required for the early withdrawal of pillar 3a account balances, but not for the regular withdrawal when reaching the required age. The pension foundation therefore complied with the client’s request and covered , by way of apology, the costs for the confirmation of residence, which in this case amounted to CHF 10.