# Pension Transfer from Switzerland to Canada



## Bloop (May 12, 2020)

Hi all, 

This is my first post so hope you guys are all doing well. Id like some guidance to help me understand the following situation, please. 

I have an occupational pension held in Switzerland and I would like to bring this over to Canada as a pension. Broadly, this must have been done before by someone but my Bank here seem to have no conception of anything that's not in USD. I just need to understand some basics : 

1. Transferring this as a pension, this would go into a locked RSP, I assume a LIRA. 
2. I want to confirm whether this is just effectively a drag and drop from a Swiss pension structure into a Canadian pension structure and there wont be any unexpected taxes on the Canadian side. 
3. I also want to access some cash early and can either do this (in Ontario) through a hardship clause or - my bank mentioned they could convert half the LIRA into a standard RSP - is this allowed? 

I know there are some fees to transfer it on the Swiss side, but all I need to know right now is whether the pension wrapper stays intact as it comes to Canada - I dont want (as my Bank suggested) this to arrive in cash and expose me to huge income tax on cash. 

Does anyone have any experience of this, otherwise - where can I go in Canada and find a cheap basic source of information, please? 

Thank you very much for your help, 

Matthew


----------



## NickZ (Jun 26, 2009)

At the moment I don't know what's open. You used to be able to ask for an opinion from your nearest tax office that would be the safe option.

Just moving the money into your RRSP is going to use up your contribution room. Do you have enough? Do you really want to do that?

https://www.canada.ca/en/revenue-ag.../topics/rrsps-related-plans/transferring.html

Those are the options that don't use contribution room but I don't think any non Cdn sources would be allowed. 

The simplest thing is likely to leave it where it is and draw funds when you need them. The social security agreement between the two countries will hopefully give you an idea on any tax issues.


----------



## Bloop (May 12, 2020)

Thank you, NickZ

Since this is already in a pension structure, I had the impression from somewhere that it could be just dropped into a RSP without affecting any contribution room - actually, I havent been employed yet in Canada so I havent built up any room at all. 

Just one thing - when you say local tax office - I assume you mean a private tax specialist and that this isnt something the canadian pensions dept (government) would offer? 

Thank you for your response and the link, in any case - much obliged 

M


----------



## NickZ (Jun 26, 2009)

No I meant your local Canada Revenue agency office. Any lawyer or CA could give you an opinion but it would be worth very little if the CRA disagrees. If you can get an appointment to talk to somebody there and they put into writing that it's okay you're much safer.


----------



## NickZ (Jun 26, 2009)

https://www.canada.ca/en/revenue-ag...international-tax-non-resident-enquiries.html

You could also try that but it really depends on your luck with who answers the phone.


----------



## Booth44 (Apr 23, 2016)

Is there some pressing reason why you can't leave the pension domiciled in Switzerland as is?

You'd have to look at the tax treaty between Canada and Switzerland for a definitive answer, or seek out someone who was an expert in this area, as to whether you can roll your Swiss private pension into a LIRA. 

If you can, then there shouldn't be any tax consequences from the Canadian side unless and until you withdraw funds from a Canadian registered investment. I'm pretty confident that there won't be any hardship clauses allowing you to avoid Canadian tax if you cash out some of your RRSP/LIRA. On the other hand, if you have significant hardship such as very low income in Canada then you may not end up paying much, if any, Canadian tax.


----------



## NickZ (Jun 26, 2009)

I doubt the tax treaty would really apply in this case. He needs to find the social security treaty. It might have a section on company pension plans.


----------



## NickZ (Jun 26, 2009)

https://www.treaty-accord.gc.ca/text-texte.aspx?lang=eng&id=102192

And I don't see anything .


----------



## Bevdeforges (Nov 16, 2007)

Is this a private pension or a government pension (i.e. a government mandated pension program)?

In any event, the usual case these days seems to be that you just keep your pension where it is and when the time comes for you to retire, you apply to the Swiss pension agency (for a government pension) or to the pension holder (for a private pension). It may only be a nominal amount if you didn't contribute for very long - but many government pensions will count all your working years toward whatever is needed to qualify (though not your salary for years worked outside the country).

If it's a savings-type pension plan (like a US IRA) probably the best thing to do is to let it sit where it is. It's going to take a few years for the various stock markets to recover from the current crisis and by the time you're ready to retire you may be pleasantly surprised to find how much has accumulated. (Do keep your address up to date with the holder of the funds.)


----------



## Booth44 (Apr 23, 2016)

I think I found a good article which deals with this issue (assuming this is a private company pension)

https://www.advisor.ca/retirement/retirement-news/how-to-bring-global-pensions-home/

The case study presented in the article is an example of a person rolling a private Swiss pension (Pillar 2 Fund) directly into a Canadian retirement plan, so that's a bonus. 

So essentially, if you have the option of taking the Swiss pension as a lump sum, and are willing to put it directly in a registered plan, then the gross pension income is declared on a Canadian tax return...you get a foreign tax credit for tax paid on the withdrawal in Switzerland....and you get a corresponding deduction for the registered plan on your Canadian return. In the article, the author states that the withholding tax on the Swiss pension is claimable on the Canadian return, but it makes more sense that the actual amount of tax paid to Swiss authorities is what's actually claimable, though I'm not 100% sure.

Probably the best people to contact here are one of the larger Canadian financial planning firms, especially if there are some with offices in Switzerland.


----------

