Switzerland

This is Pillar 2. An employer with employees in the compulsory scheme must set up or join a registered pension fund,¹ and a registered fund must be a foundation or a public-law institution, which has its own block below.² Compulsory cover reaches pay above CHF 22,680 in 2026 and CHF 23,040 from 2027,³ on the band from CHF 26,460 to CHF 90,720 in 2026 and from CHF 26,880 to CHF 92,160 from 2027.⁴ Retirement credits run at 7, 10, 15 and 18% of that band by age,⁵ with minimum interest of 1.25% since 2024⁶ and a minimum conversion rate of 6.8%.⁷ A fund may pay more, the supra-mandatory part, and this block covers both.⁸

Both you and your employer pay. The employer must pay at least as much as all its employees together,^9,10 and it takes the employee's share from pay.¹¹ That rule runs across all employees, not person by person.

A member may also pay extra, a buy-in, up to the level of the benefits under the fund's rules.¹² Someone arriving from abroad who has never belonged to a Swiss fund is limited to 20% of insured pay a year for the first five years,¹³ and benefits from a buy-in can't come out as a lump sum for three years.¹⁴ When you change jobs, the old fund must send your exit benefit to the new one.¹⁵

An employer can instead join a collective or common foundation. Each employer's plan sits inside it with its own committee,¹⁶ and the equal-representation rule may take another form there.¹⁷ A fund may place all its risks with an insurer,¹⁸ and then the foundation holds a group life policy;¹⁹ on our reading the member has no contract with the insurer. A fund that insures only pay above one and a half times the upper limit (CHF 136,080 in 2026) may offer up to ten investment strategies, known as an Article 1e plan, and your balance takes the result of the strategy you chose.^20,21

A fund not on the register may still be a cooperative.^22,23 A cooperative has members, so its classification is no stronger than a foundation's, and these answers are the cautious course for it too. An investment foundation pools money for pension bodies, whose investors are those bodies, so it has no block.²⁴

Not settled: a foundation owns the assets for its members, yet they help run it. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses Swiss pension funds. The argument that a pension foundation is a trust: a registered fund must be a foundation or a public-law institution,² a foundation is an endowment of assets for a purpose,²⁵ and the Swiss tax authorities say it owns those assets.²⁶ The people running it owe a fiduciary duty of care to the insured,^27,28 must keep the investments secure,²⁹ and answer to a supervisor who must see that the assets serve their purpose.³⁰ The beneficiaries can sue for their benefits.³¹ IRS advice on Liechtenstein entities, which is not precedent, lists among a trust's elements "a trustee that has legal title and a legal duty to protect and conserve the assets for the designated beneficiaries",³² and says Stiftungs will generally be trusts unless created primarily for commercial purposes.³³ The Fifth Circuit classified a Liechtenstein Stiftung as a foreign trust, asking first whether the arrangement is a trust and looking to its purpose, with its form as evidence only.^34,35,36,37 Those were family foundations a person controlled, not pensions.

The closest authority on a pension is a private ruling, which is not precedent: the IRS held a foreign pension entity to be a trust.³⁸ Its facts track Swiss law. A statute governed it and participation was mandatory,³⁹ its benefits followed a formula and its members could not assign their interests,^40,41 and on a job change a member's share went to the new pension fund, with a lump sum on expatriation,⁴² as under the Vested Benefits Act.^15,43 A fund whose members chose their investments had its own ruling as a trust, though that fund was organized as a trust with a trustee.⁴⁴

The argument that it is not starts with the jointly elected board. A trust's beneficiaries "cannot share" in the responsibility for the property,⁴⁵ and a Swiss fund's managing body must have as many employee as employer representatives, with the same rights.^46,47 As a comparison only, the U.S. rule for jointly run union and employer funds has the money "held in trust" with employees and employers "equally represented",⁴⁸ which shows a representative board can coexist with trust form; it does not govern a Swiss fund. Swiss law sets a foundation, an endowment of assets, apart from associations of persons,^25,49 so on our reading it has no members who hold a stake, which is what the Code treats as shareholders of an insurance company.⁵⁰

A self-insuring defined benefit fund promises formula benefits and bears the risk, so it functionally issues annuities, and the Code treats insurance companies as corporations.⁵¹ As a comparison, a participant in a U.S. defined benefit plan also holds a claim rather than a share of an asset,⁵² and a Swiss fund is not a licensed insurer: the law keeps the two apart,¹⁸ and insurers must be stock companies or cooperatives.⁵³ A foundation that places all risk with an insurer holds a group policy, and the assets are the insurer's, though a foundation owned by no one holds that policy for the members and pays the benefits.^18,19 Defined benefit funds and full-insurance funds are the weakest cases for a trust.

A foundation is also a separate legal person, taxed in its own right. The Second Circuit saw such foundations as partly like a corporation,⁵⁴ and the Tax Court said those features are not a sufficient basis for classifying a Stiftung for every tax purpose,⁵⁵ though those were estate tax cases, and the Second Circuit agreed the tax followed "regardless of how" the Stiftungs were classified.⁵⁶ Form is evidence only.³⁶ A collective foundation is an insurer's or a bank's product, but the advice asks about the entity's own purpose,³³ and a supervisor must see that its assets serve that purpose,³⁰ so on our reading the sponsor's motive is not the entity's purpose.

With the question open and the penalty for a missing Form 3520-A large,⁵⁷ this guide takes the cautious course of reading a pension foundation as a trust. Governed by Swiss law and run in Switzerland, it would meet neither test for a domestic trust, so it would be foreign.^58,59 If it is not a trust, it is a foreign entity classified under the default rules,⁶⁰ and Forms 3520 and 3520-A don't reach it.

On the cautious reading, a §402(b) employees' trust. Compulsory shares count as the employer's; buy-ins are your own money.

On the cautious reading this is a §402(b) employees' trust: an employer pays in for its employees, and the IRS has ruled privately that a foreign fund with mandatory employer contributions and personal accounts is one.⁶¹ A trust created outside the United States escapes §402(b) only if it would otherwise meet §401(a),^62,63 and on our reading nothing suggests a Swiss plan does.

Employer contributions are U.S. income to you when paid, to the extent vested,^64,65 and the foreign earned income exclusion cannot cover them.⁶⁶ You are not treated as owner of the part they fund.⁶⁷ In a savings plan you leave with the whole savings capital, employer credits included, so on our reading they vest as credited.⁶⁸ In a defined benefit plan the exit value is the present value of benefits earned,⁶⁹ with a floor of your own money plus 4% a year of age over 20, up to 100%,⁷⁰ and the employer's share for one person is worked out by actuarial methods.⁷¹

Compulsory money withheld from your pay counts as the employer's, on Chief Counsel advice on Singapore's fund, which is not precedent.⁷² Swiss law's rule that at least a third of all contributions is the employee's sets the exit floor, not this count.⁷³ Elective money is your own:⁷⁴ buy-ins, and the difference where you choose a higher plan among up to three, since the employer's rate must be the same in each.⁷⁵ Once your own total exceeds the employer's for you, you are treated as owner of the part it funds, if the grantor trust rules are otherwise met.⁷⁶ §679 does not apply to a §402(b) trust,⁷⁷ so that means §677. In a savings plan the income is credited to you,^68,78 and in a defined benefit plan whether that is met is not settled, so this guide keeps the cautious course. A buy-in can pass the employer's total in one payment.

Whether a move between foreign plans is taxable is not settled. IRS officials told GAO, in a report that is not IRS guidance, that the IRS "generally considers routine administrative transfers of retirement assets that occur between or within foreign retirement plans to be distributions to the participant and therefore taxable income",⁷⁹ and also that transfers "may be taxable", depending on your control and on "a substantial limitation or restriction", which a penalty tax on early withdrawal "could be".^80,81 The first statement rests on transfers implying "some access to and control over" the money.⁸² GAO's Swiss appendix says that on a move to a vested benefits institution the plan "mandatorily transfers" the assets,⁸³ and when you join a new fund Swiss law makes the old fund send your exit benefit.¹⁵ Against that, IRS officials also said money can become technically available "even though the individual takes no action to access the funds",⁸⁴ and that "there is no way that the plan can structure the transfer" to avoid a distribution.⁸⁵

So a compelled, locked move between two funds read as §402(b) trusts is, on our reading, not a receipt under that test, though no IRS guidance accepts that and the officials' main statements point the other way, and on that reading nothing is paid out, so no form changes: no Part I and no Part III. No IRS guidance addresses it, and if the IRS reads it as a distribution a missed Part III can cost the greater of $10,000 or 35% of the amount, capped at the amount,^86,87 so the cautious course is to show the money going out on Part III unless you report it as compensation income.⁸⁸ The form does not fit money you do not own. It sends a No on line 30 to Schedule A,⁸⁹ whose default method treats the part of this year's distributions above 1.25 times the average of the three years before as an accumulation distribution, with Form 4970 tax and interest, and the rest as ordinary income.^90,91 Where the plan paid you nothing in those three years, that is the whole amount, unless it is the plan's first year as a foreign trust, when no accumulation distribution is figured.⁹² The statute treats the whole amount as an accumulation distribution where adequate records are not given.⁹³ Our reading is that this does not fit a §402(b) trust, whose payouts are taxed under §72, not under the trust distribution rules,^94,95 so we would show the amount on lines 24 and 27,⁹⁶ leave lines 29 and 30 unmarked, which the IRS's processing manual says draws no edit,⁹⁷ and attach the plan's statement and an explanation. That is a position, not an instruction: the form's words point the other way, and leaving out the schedule can be argued to be an incomplete return. Have a preparer decide. This site's forms do not prepare it. A failed locked reading can also undo the exemption, which needs the income reported.⁹⁸ No contribution to a §402(b) trust is a Part I event.⁹⁹ Rev. Proc. 2020-17's text on plan-to-plan moves speaks only to the exemption.¹⁰⁰ On the locked reading the money keeps its mix: count the part the earlier plan's records show as yours. If you report the move as income, that amount is your own money and basis in the new fund. Someone whose own money, counted from those records, exceeds the employer's money, the earlier employer's included, can still reach Part II on that part, and a buy-in can do the same.⁷⁶ Income tax is a separate question from these forms. Reading the move as a payout means U.S. tax that year on the amount above your basis, which is what has already been taxed to you and employer money that would not have been income if paid to you directly, but not contributions for work done, or earnings made, while you were a nonresident alien that no country taxed; reading it as locked means none now.^94,101,102 That is not settled, the forms don't decide it, and you should keep the records of what moved and what was taxed.

Payouts from the employer's part are taxed under §72, with the employer money already taxed to you as basis, when they are paid or made available.^94,103,101 A member who has left Switzerland for good can have cash on request,¹⁰⁴ and whether that makes it available is not settled.^105,106 If you are a highly compensated employee and one reason the plan is not exempt is that it fails the U.S. coverage tests, you include your vested balance, less what has already been taxed to you, in income each year.¹⁰⁷ A fund may set groups by rank or function,¹⁰⁸ and an Article 1e plan by design covers only high pay,²⁰ so an executive plan may raise this rule.

Rev. Proc. 2020-17: not settled, three conditions open. Proposed regulations: a value test for the limit; payouts stay open.

Rev. Proc. 2020-17 exempts an eligible individual (one who has filed U.S. returns and reported the plan's income as U.S. law requires)⁹⁸ from Forms 3520 and 3520-A for a retirement trust that meets its conditions.¹⁰⁹ With no IRS guidance on Swiss funds, whether it covers one is not settled. A fund's size is not one of the conditions. A fund points toward three of them. It is tax-favored: contributions are deductible, the fund is exempt, and claims are not taxed before they fall due.^{110,111,112,113} It must file a certificate of the benefits it pays for each tax period, and deductions from pay appear on the salary certificate.^114,115 A year with no payout may produce nothing for the tax authorities, so the yearly reporting condition is arguable, under its words "otherwise available".¹¹⁶ And contributions follow pay,^117,118 though a buy-in is not tied to that year's pay and cover can continue after you leave,^12,119 which we read as not defeating the condition; that is not settled.

Three are open. Contributions must be limited by a percentage of the participant's earned income or a dollar cap.¹²⁰ Regular money may meet that: the adequacy rule tests contributions at 25% across all insurable pay, not one participant's, or caps benefits instead,¹²¹ and insurable pay is capped at ten times the upper limit, CHF 907,200 for 2026.¹²² But buy-ins are capped by a plan's benefits, not by a percentage of pay,¹² except in an Article 1e plan, where the buy-in sum counts contributions of no more than an average of 25% of insured pay per possible year.¹²³

Payouts must wait for retirement age, disability or death, or carry a penalty.¹²⁴ Retirement age, disability and death fit, and buying a home is among the reasons Rev. Proc. 2020-17 accepts.^125,126 But you can also take cash on leaving Switzerland for good, on starting self-employment, or where the benefit is less than a year's contributions,^43,104 and a lump sum has its own lower Swiss rate, so on our reading that is no penalty.¹²⁷ Leaving is not among its examples. "Such as" is not a closed list, and leaving ends your place in the system, takes proof and needs a spouse's written consent;¹²⁸ but the examples are needs, and someone who moves can take the whole sum. No IRS guidance answers this.

An employer's plan must cover a wide range of employees, rank and file included.¹²⁹ Compulsory cover reaches pay over the threshold above and equal terms apply within a group,^3,130 but groups may be set by function or rank,¹⁰⁸ so an executive-only plan may fail unless read with the employer's other plans. That one turns on the plan.

Rev. Proc. 2020-17's closing sentence to §5.03 is a safe harbor: a trust does not fail the conditions solely because it may receive a rollover from another qualifying trust under the same country's laws.¹⁰⁰ A fund that takes in exit benefits doesn't fail for that reason, so long as the sending fund also meets the conditions.

The proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹³¹ let a value test stand in for a contribution limit. They test "the aggregate value of the trust(s) in the trust's jurisdiction", at or under US$600,000 at every point in the year (adjusted for inflation from 2026).¹³² On our reading that adds together all your trusts in Switzerland, but a pooled fund read as one trust may fail on that wording. They don't help on payouts, where the text has the same words,¹³³ and the employer condition stays.¹³⁴ Rev. Proc. 2020-17 §5.04 does not fit: it covers medical, disability and educational savings.¹³⁵

No deferral: the saving clause keeps U.S. tax. A U.S. resident can reclaim Swiss tax withheld on a lump sum.

No deferral. Article 18(1) makes a pension in consideration of past employment taxable only where you live,¹³⁶ lump sums included, as an IRS letter says, which is not a ruling.¹³⁷ So a U.S. resident is taxed by the United States.¹³⁸ For a U.S. citizen living in Switzerland, the saving clause lets the United States tax its citizens, and people it treats as residents unless the treaty's tie-breaker makes them residents of Switzerland, as if the treaty had not come into effect,¹³⁹ and Article 18 is not among the exceptions.¹⁴⁰ A Chief Counsel memo on a U.S. citizen living in Switzerland, which is not precedent, reads it the same way,¹⁴¹ and Treasury officials told GAO the same of Swiss retirement accounts.¹⁴² No article defers U.S. tax on a fund's income or relieves contributions. Article 28(4) can treat contributions like U.S. ones for up to five taxable years, but only for someone already in a Swiss plan who comes to work in the United States and is neither a citizen nor a green card holder, and only if the competent authority agrees the plan generally corresponds;^143,140 we found no such agreement for a Swiss plan. A pension earned in public service turns on your employer and service, not the fund's form, as the next block's treaty step says.¹⁴⁴

The treaty has no rule on moves between plans. Treasury says Article 28(4) leaves out the U.S. Model's exemption from tax on rollovers from one plan to another,¹⁴⁵ and it describes Article 18 as reaching amounts paid.¹⁴⁶ Treasury officials told GAO few treaties address this.¹⁴⁷

The treaty also decides Swiss tax on a payout. A lump sum to someone living abroad always has tax taken,¹⁴⁸ and it comes back if a U.S. resident applies within three years with a confirmation from the U.S. tax authority.¹⁴⁹ The Federal Tax Administration's table for the United States reads: no withholding on private-law pensions, and a refund on lump sums.¹⁵⁰ Tax you could reclaim is not a creditable tax.¹⁵¹ A U.S. citizen living in Switzerland pays Swiss tax with no such refund, and the treaty allows the U.S. credit, subject to the limitations of U.S. law.¹⁵² Watch the timing: the United States taxes employer money as it is paid in, and Switzerland taxes the whole payout,^64,153 so the two can fall in different years.

A green card holder who is a resident of Switzerland under the treaty's tie-breaker is not subject to the saving clause, though a U.S. citizen stays subject to it.¹³⁹ Such a person can figure their U.S. tax as a nonresident, filing Form 1040-NR with Form 8833,^154,155 but is still treated as a U.S. resident for other purposes,^156,157 so the cautious course is to keep filing Forms 3520 and 3520-A unless you rely on the proposed regulations, which treat you as not a U.S. person for that time.^158,131 For a long-term resident, starting to be treated as resident abroad under a treaty, without waiving its benefits, ends lawful permanent residence for tax purposes once the IRS is notified, and that is an expatriation.^159,160

Disclosing a treaty position on Form 8833 is otherwise waived for pensions.¹⁶¹ The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax,¹⁶² and nothing in Article 18 or Article 28 of this treaty reaches them.^136,143

Part II and Form 3520-A each year for the part your own money funds, once yours exceeds your employer's.

Read as a §402(b) trust: no Part I for any contribution, a buy-in included.⁹⁹ No Part II or Form 3520-A for the employer-funded part, compulsory money withheld from your pay included; once your own money, buy-ins included, exceeds your employer's, Part II and Form 3520-A each year for the part it funds.^67,76,163 No Part III for payouts from the employer-funded part that you report as compensation income;^88,164 payouts from a part you own go on Part III, lines 24 and 27.¹⁶⁵ A death benefit paid straight to a U.S. heir is a payout from a foreign trust on this reading, and since it is not settled whether an heir can report it as compensation income, the cautious course is to report it on Part III.^166,88 No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year.^94,95,167 If the fund does not file Form 3520-A, you attach a substitute to your Form 3520.¹⁶⁸

Moves, on the cautious course. To a new fund read as a §402(b) trust: no Part I,⁹⁹ Part III for the money going out unless you report it as compensation income,⁸⁸ and on the locked reading the money keeps its mix; if you report the move as income, that amount is your own money and basis in the new plan.¹⁵ To a vested benefits account, read as a foreign trust you own: Part I for the money going in, while you are a U.S. person or within 5 years before your U.S. residency started,^169,170 and Part III for the money going out unless you report it as compensation income, as a protective filing, on lines 24 and 27 for a part you owned.^88,165 To a policy with an insurer: the same Part III for the money going out, and nothing for the policy. No IRS guidance addresses these, so they are not settled. A divorce split, and a pledge, advance or repayment for a home, also move or tie up the money, and how they are reported is not settled, since no IRS guidance addresses them.^171,41

If a pension foundation is not a trust, none of these apply, since Forms 3520 and 3520-A report foreign trusts.¹⁶⁹ Either way, an eligible individual whose plan qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them, and that is not settled.^109,131 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^172,173

This is the other form a registered fund can take: an institution under public law with its own legal personality, for public employees.² The public body itself may set either its benefits or its financing.¹⁷⁴ The rest of the pension foundation block's description applies: an employer pays in, at least as much as all its employees together,⁹ and the duties of those running it are the same.²⁷

Not settled: an arm of the state under public law, yet a funded pension body. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses Swiss public-law funds. The argument that one is a trust: it has the same fiduciary duties as a foundation,²⁷ and its obligations must generally be covered by a funded pool of assets.¹⁷⁵ In a private ruling the IRS held a foreign pension entity to be a trust although a statute governed it and a government body regulated it,^38,39 and Chief Counsel advice, which is not precedent, treated Singapore's statutory Central Provident Fund as a §402(b) trust.¹⁷⁶

The argument that it is not: it is an arm of the state under a public-law statute, not a trustee,² and a trust for U.S. purposes needs trustees who take title to property for the beneficiaries.¹⁷⁷ A fund not fully funded when the 2010 change took effect may stay partly funded if the public body guarantees it,^178,179 so the claim then rests partly on the state and not on a conserved fund. IRS advice on Liechtenstein entities, which is not precedent, treats an Anstalt as generally no trust, but because it runs a business, which a pension fund does not.¹⁸⁰

With the question open and the penalty for a missing Form 3520-A large,⁵⁷ this guide takes the cautious course of reading a public-law fund as a trust. Governed by Swiss law and run in Switzerland, it would meet neither test for a domestic trust, so it would be foreign.^58,59

On the cautious reading, a §402(b) employees' trust, as for a pension foundation.

On the cautious reading this is a §402(b) employees' trust, with the same rules as for a pension foundation. Employer contributions are U.S. income to you when paid, to the extent vested,^64,65 compulsory money withheld from your pay counts as the employer's,⁷² and elective money, buy-ins included, is your own.⁷⁴ Once your own total exceeds the employer's for you, you are treated as owner of the part it funds, if the grantor trust rules are otherwise met;⁷⁶ in a pooled defined benefit plan, whether they are met is not settled, and this guide keeps the cautious course.⁷⁸ Payouts are taxed under §72.⁹⁴

Whether a move between foreign plans is taxable is not settled. IRS officials told GAO, in a report that is not IRS guidance, that the IRS "generally considers routine administrative transfers of retirement assets that occur between or within foreign retirement plans to be distributions to the participant and therefore taxable income",⁷⁹ and also that transfers "may be taxable", depending on your control and on "a substantial limitation or restriction", which a penalty tax on early withdrawal "could be".^80,81 The first statement rests on transfers implying "some access to and control over" the money.⁸² GAO's Swiss appendix says that on a move to a vested benefits institution the plan "mandatorily transfers" the assets,⁸³ and when you join a new fund Swiss law makes the old fund send your exit benefit.¹⁵ Against that, IRS officials also said money can become technically available "even though the individual takes no action to access the funds",⁸⁴ and that "there is no way that the plan can structure the transfer" to avoid a distribution.⁸⁵

So a compelled, locked move between two funds read as §402(b) trusts is, on our reading, not a receipt under that test, though no IRS guidance accepts that and the officials' main statements point the other way, and on that reading nothing is paid out, so no form changes: no Part I and no Part III. No IRS guidance addresses it, and if the IRS reads it as a distribution a missed Part III can cost the greater of $10,000 or 35% of the amount, capped at the amount,^86,87 so the cautious course is to show the money going out on Part III unless you report it as compensation income.⁸⁸ The form does not fit money you do not own. It sends a No on line 30 to Schedule A,⁸⁹ whose default method treats the part of this year's distributions above 1.25 times the average of the three years before as an accumulation distribution, with Form 4970 tax and interest, and the rest as ordinary income.^90,91 Where the plan paid you nothing in those three years, that is the whole amount, unless it is the plan's first year as a foreign trust, when no accumulation distribution is figured.⁹² The statute treats the whole amount as an accumulation distribution where adequate records are not given.⁹³ Our reading is that this does not fit a §402(b) trust, whose payouts are taxed under §72, not under the trust distribution rules,^94,95 so we would show the amount on lines 24 and 27,⁹⁶ leave lines 29 and 30 unmarked, which the IRS's processing manual says draws no edit,⁹⁷ and attach the plan's statement and an explanation. That is a position, not an instruction: the form's words point the other way, and leaving out the schedule can be argued to be an incomplete return. Have a preparer decide. This site's forms do not prepare it. A failed locked reading can also undo the exemption, which needs the income reported.⁹⁸ No contribution to a §402(b) trust is a Part I event.⁹⁹ Rev. Proc. 2020-17's text on plan-to-plan moves speaks only to the exemption.¹⁰⁰ On the locked reading the money keeps its mix: count the part the earlier plan's records show as yours. If you report the move as income, that amount is your own money and basis in the new fund. Someone whose own money, counted from those records, exceeds the employer's money, the earlier employer's included, can still reach Part II on that part, and a buy-in can do the same.⁷⁶ Income tax is a separate question from these forms. Reading the move as a payout means U.S. tax that year on the amount above your basis, which is what has already been taxed to you and employer money that would not have been income if paid to you directly, but not contributions for work done, or earnings made, while you were a nonresident alien that no country taxed; reading it as locked means none now.^94,101,102 That is not settled, the forms don't decide it, and you should keep the records of what moved and what was taxed.

As for a pension foundation: Rev. Proc. 2020-17 not settled, with three conditions open.

As for a pension foundation, whether Rev. Proc. 2020-17 covers a public-law fund is not settled.¹⁰⁹ The tax rules are the same,^111,113 and the yearly certificate of benefits leaves the reporting condition arguable, under its words "otherwise available".^114,116 The limit, payout and employer conditions are open on the same grounds.^{12,120,43,124,108,129} The proposed regulations, which you may rely on as the instructions describe,¹³¹ let a value test stand in for a contribution limit, on our reading adding together all your trusts in Switzerland, though a pooled fund read as one trust may fail on that wording.¹³² They don't help on payouts.¹³³

Article 19(2) turns on your employer and service: taxed only in Switzerland unless you are a U.S. national or green card holder.

Article 19(2) turns on whom you served and who created the funds, not on the fund's legal form. A pension paid by Switzerland, a canton or a commune, or out of funds it created, for services rendered to it is taxable only in Switzerland, unless you are a resident and a national of the United States.¹⁴⁴ A pension for services in connection with a business the state carries on falls under Article 18 instead.^181,182 The Federal Tax Administration's leaflet keys its withholding to a former public employer, and counts state-related businesses that carry out a public task as public employers.¹⁸³ So read this step by your employer and service: on our reading, public staff in a private foundation may be within Article 19(2), and staff of a state-owned business such as a cantonal bank may be under Article 18. No IRS guidance addresses it. Treasury says of a U.S. resident with such a pension that it is taxable only in Switzerland "unless the individual is a U.S. citizen or acquires a U.S. green card".¹⁸⁴ The saving clause keeps the U.S. right over them.¹⁴⁰ So a U.S. citizen or green card holder is taxed by the United States, with no deferral.

The treaty has no rule on moves between plans. Treasury says Article 28(4) leaves out the U.S. Model's exemption from tax on rollovers from one plan to another,¹⁴⁵ and it describes Article 18 as reaching amounts paid.¹⁴⁶ Treasury officials told GAO few treaties address this.¹⁴⁷

The Federal Tax Administration's table for the United States follows nationality. A Swiss or third-country national has tax taken from a pension and no refund on a lump sum; a U.S. national, or a national of both, has none taken from a pension and a refund on a lump sum.¹⁸⁵ Tax you could reclaim is not a creditable tax.¹⁵¹ Tax Switzerland keeps may be credited, subject to the limitations of U.S. law.¹⁵² Watch the timing: the United States taxes employer money as it is paid in, and Switzerland taxes the whole payout,^64,153 so the two can fall in different years. Form 8833 is waived for pensions.¹⁶¹

Part II and Form 3520-A each year for the part your own money funds, once yours exceeds your employer's.

Read as a §402(b) trust: no Part I for any contribution, a buy-in included.⁹⁹ No Part II or Form 3520-A for the employer-funded part, compulsory money withheld from your pay included; once your own money, buy-ins included, exceeds your employer's, Part II and Form 3520-A each year for the part it funds.^67,76,163 No Part III for payouts from the employer-funded part that you report as compensation income;^88,164 payouts from a part you own go on Part III, lines 24 and 27.¹⁶⁵ A death benefit paid straight to a U.S. heir is a payout from a foreign trust on this reading, and since it is not settled whether an heir can report it as compensation income, the cautious course is to report it on Part III.^166,88 No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year.^94,95,167 If the fund does not file Form 3520-A, you attach a substitute to your Form 3520.¹⁶⁸

Moves, on the cautious course. To a new fund read as a §402(b) trust: no Part I,⁹⁹ Part III for the money going out unless you report it as compensation income,⁸⁸ and on the locked reading the money keeps its mix; if you report the move as income, that amount is your own money and basis in the new plan.¹⁵ To a vested benefits account, read as a foreign trust you own: Part I for the money going in, while you are a U.S. person or within 5 years before your U.S. residency started,^169,170 and Part III for the money going out unless you report it as compensation income, as a protective filing, on lines 24 and 27 for a part you owned.^88,165 To a policy with an insurer: the same Part III for the money going out, and nothing for the policy. No IRS guidance addresses these, so they are not settled.

If it is not a trust, none of these apply, since Forms 3520 and 3520-A report foreign trusts.¹⁶⁹ Either way, an eligible individual whose plan qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them, and that is not settled.^109,131 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^172,173

This is a foundation funded by the employer alone, that pays benefits at its discretion or finances other pension plans.¹⁸⁶ It stands outside the vesting law, and it may also pay in emergencies and for illness, training or family needs.¹⁸⁷ If employees do pay in, the pension foundation block applies instead.⁴⁷

Not settled: a foundation funded by the employer alone. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses Swiss welfare funds. The argument that one is a trust: it is a foundation with the same duties of those running it, and its assets must serve its purpose under a supervisor.^25,186,30,33 With no contributions from employees, the doubt over members sharing in running it is weaker.^47,45 The argument that it is not: a reserve the employer controls may look like the employer's own money.¹⁷⁷ With the question open, this guide takes the cautious course of reading it as a trust. Governed by Swiss law and run in Switzerland, it would meet neither test for a domestic trust.^58,59

On the cautious reading, a §402(b) employees' trust, with nothing vested until you are paid.

On the cautious reading a §402(b) employees' trust. Employer money is income to you only when it vests,^64,65 and with no right to anything, we read nothing as vested until it is paid. No IRS guidance addresses a no-claim interest. If you have a highly compensated employee's position in a plan that fails the U.S. coverage tests, the §402(b)(4) rule can apply.¹⁰⁷

Not needed for Part I or Part II: you put nothing in and own nothing.

Not needed for Part I or Part II, since you put nothing in and own nothing.^99,67 For Part III a payment reported as compensation income is already off the form.⁸⁸ It may not qualify in any case: Rev. Proc. 2020-17 wants a trust that operates exclusively or almost exclusively for pensions and incidental benefits,¹⁰⁹ and this kind of fund may pay for other needs.¹⁸⁷

No deferral: the saving clause keeps U.S. tax, as for a pension foundation.

No deferral. As for a pension foundation, a payout to a U.S. resident is taxable in the United States, and the saving clause keeps a U.S. citizen taxed.^136,139,140 A benefit paid for need, and not in consideration of past employment, may fall outside Article 18 altogether; no IRS guidance addresses it.¹³⁶

No Part I or Part II; Part III only for a payment you do not report as compensation income.

No Part I or Part II: you put nothing in and own nothing.^99,67 A payment goes on Part III unless you report it as compensation income.^88,164,166 No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules.^94,95

If it is not a trust, none of these apply, since Forms 3520 and 3520-A report foreign trusts.¹⁶⁹ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^172,173

When you leave a fund with no new one to join, Swiss law keeps the money in pension form.¹⁸⁸ The choice is an account with a foundation or a policy with an insurer,¹⁸⁹ and this block is the account: a contract with a foundation, serving pension provision exclusively and irrevocably.¹⁹⁰ If you give no instruction, the fund must send the money to the Substitute Institution after six months to two years,¹⁹¹ and that institution runs accounts of its own.¹⁹² Nothing new goes in except exit benefits.¹⁹³ Old-age benefits start at the earliest five years before the reference age,¹⁹⁴ and cash comes out earlier only in the same cases as from a fund.^195,104 The claim can't be pledged or assigned, apart from a divorce and a pledge for a home.¹⁹⁶ If you join a new fund, the money must move to it.¹⁹⁷

Who holds title depends on the contract. Money a foundation does place in its own name at a bank counts as each insured person's savings deposit for the Banking Act.^198,199 Real contract terms, not law, go both ways. One foundation's rules make paid-in balances part of its assets, invested in its name and for its account,²⁰⁰ with the account in the name of the insured person.²⁰¹ Another's say it opens the account at the bank in the saver's name.²⁰² For securities, one foundation buys fund units in its own name, for your benefit and account and on your instructions.²⁰³ The Substitute Institution's rules open an account in your name, and it invests all of the money together and its board sets the interest.^204,205

Not settled: a contract in your name, yet a foundation enforces the lock. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses vested benefits accounts. A U.S. trust is an arrangement whose purpose is to vest in trustees the responsibility for protecting and conserving property for beneficiaries who cannot share in that responsibility,⁴⁵ and federal law, not the Swiss label, decides.²⁰⁶

The argument that it is not a trust: it is a contract in your name, and Swiss law treats the money as your deposit if the bank fails.^190,199 The Swiss government's English calls it a blocked bank account.²⁰⁷ On the securities rules we read you direct the investments and bear the result,²⁰³ and the closest IRS ruling holds that an arrangement whose title-holder only holds and transfers title at the owner's direction is not a trust.²⁰⁸ A pledge for a home does not point the other way: in that ruling the holder had to grant a security interest on request.^209,196

The argument that it may be one: that ruling does not apply where the holder does more than hold title,²¹⁰ and here a foundation with no members enforces a lock you can't lift and pays only on statutory events.^194,195 The money serves pensions exclusively and irrevocably,¹⁹⁰ and the IRS has ruled privately that a fund whose members could not assign their interests is a trust.³⁸ A pooled account at the Substitute Institution is the stronger case.²⁰⁴

Two official lists name these arrangements for other purposes: Announcement 2025-8 for the treaty's dividend article,²¹¹ and the 2024 FATCA agreement for bank reporting.²¹² Neither classifies them for §6048.

With the question open and the penalty for a missing Form 3520-A large,⁵⁷ this guide takes the cautious course of treating it as a trust, and a foreign one.^58,59

Not settled. The foundation takes no employer's money, so the cautious course is the whole balance; the other reading is real.

Two readings are open, and no IRS guidance chooses between them. On one, the account continues the employees' trust: the law calls this keeping pension cover in another form,¹⁸⁸ and if a trust makes a gratuitous transfer to another trust, its grantor generally stays the grantor.²¹³ Your employer would stay a grantor of what it funded, with no Part I, and Part II only if your own money exceeds the employer's.

On the other, it is a foreign trust you own, on the whole balance. That is this guide's cautious course. A vested benefits foundation takes no employer's contributions,¹⁹³ §6048(a)(3)(B)(ii) covers only employer-plan trusts such as one described in §402(b),⁹⁹ and §402(b) reaches an employer's contributions to an employees' trust,⁶⁴ while a missing Form 3520-A costs 5% of the balance.⁵⁷ The Substitute Institution is itself a pension fund that also takes in employers,²¹⁴ but it keeps a separate account for these vested accounts,¹⁹² and we read them the same way. This course may overstate what you own, by treating money your employer funded as yours, and the amount on Form 3520-A is what the 5% penalty is measured on.

Whether a move between foreign plans is taxable is not settled. IRS officials told GAO, in a report that is not IRS guidance, that the IRS "generally considers routine administrative transfers of retirement assets that occur between or within foreign retirement plans to be distributions to the participant and therefore taxable income",⁷⁹ and also that transfers "may be taxable", depending on your control and on "a substantial limitation or restriction", which a penalty tax on early withdrawal "could be".^80,81 The first statement rests on transfers implying "some access to and control over" the money.⁸² GAO's Swiss appendix says that on a move to a vested benefits institution the plan "mandatorily transfers" the assets,⁸³ and when you join a new fund Swiss law makes the old fund send your exit benefit.¹⁵ Against that, IRS officials also said money can become technically available "even though the individual takes no action to access the funds",⁸⁴ and that "there is no way that the plan can structure the transfer" to avoid a distribution.⁸⁵ When you leave for no new fund you choose the form of the account, but the money stays locked.^188,194 Income tax is a separate question from these forms. Reading the move as a payout means U.S. tax that year on the amount above your basis, which is what has already been taxed to you and employer money that would not have been income if paid to you directly, but not contributions for work done, or earnings made, while you were a nonresident alien that no country taxed; reading it as locked means none now.^94,101,102 That is not settled, the forms don't decide it, and you should keep the records of what moved and what was taxed.

Rev. Proc. 2020-17: possible, not settled. Leaving is not among its examples, and the sending plan matters too.

Rev. Proc. 2020-17 exempts an eligible individual⁹⁸ for a retirement trust that meets its conditions.¹⁰⁹ An account points toward several. Its claims are not taxed before they fall due.^112,113 Benefits it pays are certified to the tax authorities for each tax period,¹¹⁴ but a year with no payout may produce nothing for them, so the yearly reporting condition is arguable, under its words "otherwise available".¹¹⁶ Only exit benefits come in, so the conditions on earned income and on a limit have little to act on,^193,118,120 and no employer maintains it.¹²⁹

One open point is the payouts. Retirement age, disability and death fit, and buying a home is among the reasons it accepts,^215,126 but you can take cash on leaving Switzerland for good, or on starting self-employment.^195,104 Leaving is not among its examples, and no IRS guidance answers this.¹²⁴

The other is what comes in. Rev. Proc. 2020-17's closing sentence to §5.03 is a safe harbor: a trust does not fail the conditions solely because it may receive a rollover from another qualifying trust under the same country's laws.¹⁰⁰ An account that takes in exit benefits doesn't fail for that reason so long as the sending plan also meets the conditions, so this answer leans on the pension foundation's, which is not settled.

The proposed regulations, which you may rely on as the instructions describe,¹³¹ let a value test stand in for a contribution limit, on our reading adding together all your trusts in Switzerland.¹³² They don't help on payouts, where the text has the same words.¹³³

No deferral: the saving clause keeps U.S. tax. A U.S. resident can reclaim Swiss tax withheld on a lump sum.

No deferral. Article 18(1) makes a pension in consideration of past employment taxable only where you live, lump sums included,^136,137 and Treasury says the term reaches private arrangements, even an IRA,²¹⁶ so on our reading a payout here counts. For a U.S. resident that means U.S. tax,¹³⁸ and for a U.S. citizen living in Switzerland the saving clause keeps U.S. tax.^139,140,141

The treaty has no rule on moves between plans. Treasury says Article 28(4) leaves out the U.S. Model's exemption from tax on rollovers from one plan to another,¹⁴⁵ and it describes Article 18 as reaching amounts paid.¹⁴⁶ Treasury officials told GAO few treaties address this.¹⁴⁷

Swiss tax follows the same rules as a fund's: a lump sum to someone living abroad always has tax taken,¹⁴⁸ and a U.S. resident can reclaim it within three years,¹⁴⁹ so it is not a creditable tax.¹⁵¹ A U.S. citizen living in Switzerland has no such refund, and the treaty allows the U.S. credit, subject to the limitations of U.S. law.¹⁵² Watch the timing: on this course the United States taxes the income each year, and Switzerland taxes the whole payout,^167,153 so the two can fall in different years. Form 8833 is waived for pensions.¹⁶¹ A green card holder whom the treaty's tie-breaker makes a resident of Switzerland is still treated as a U.S. resident for other purposes, so the cautious course is to keep filing unless you rely on the proposed regulations.^156,157,158

On the cautious course, full reporting on the whole balance, as for a foreign trust you own; this may overstate what you own.

On the cautious course, you report it as a foreign trust you own, on the whole balance: on that course you put the money in, and its income is held for you,^78,77 so Part II and Form 3520-A are due each year,¹⁶³ and payouts go on Part III, lines 24 and 27, as payouts to an owner.^166,165 Part I applies for the year money moves in while you are a U.S. person,¹⁶⁹ and money moved in within 5 years before your U.S. residency started is treated as moved on your residency starting date and goes on Part I for that year.¹⁷⁰ Part I also applies at your death as a U.S. citizen or resident, if any part of the account is then treated as owned by you or is in your gross estate: your executor reports it, whether or not the executor is a U.S. person.²¹⁷ If the foundation does not file Form 3520-A, you attach a substitute to your Form 3520.¹⁶⁸ No Form 4970, because the income is taxed to you each year.¹⁶⁷

The money going out of the pension fund goes on Part III, lines 24 and 27, unless you report it as compensation income, as a protective filing.^88,165 A move from one vested benefits foundation to another reads the same way, with Part III for the money out and Part I for the money in.^79,169 A move back into a pension fund you join is Part III for the money out of the account and no Part I for the money in, because that fund is read as a §402(b) trust.^197,99 How much of it counts as yours in the new fund is not settled; at the least, count what the earlier records show as yours.⁷⁶ A move to a policy with an insurer is Part III for the money out, and a move from a policy into an account is Part I for the money in, with nothing for the policy. No IRS guidance addresses these, so they are not settled. A divorce split, and a pledge, advance or repayment for a home, also move or tie up the money, and how they are reported is not settled too.^171,196

On the other reading in the §402(b) step, a continuing employees' trust, there is no Part I, and Part II only if your own money exceeds the employer's.^213,76

A death benefit paid straight to a U.S. beneficiary is a payout from a foreign trust on this reading, and the cautious course is to report it on Part III.¹⁶⁶ If the saver was not a U.S. person, no U.S. owner was taxed on the income, so the reason above for no Form 4970 does not reach that beneficiary: whether the payment can carry out income kept in earlier years is not settled, and no IRS guidance addresses it.⁹¹ The Vested Benefits Ordinance sets who the beneficiaries are.²¹⁸

If it is not a trust, none of these apply, since Forms 3520 and 3520-A report foreign trusts.¹⁶⁹ An eligible individual whose plan qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them, and that is not settled.^109,131 On our reading the exemption also spares your executor the report of your death, if you were an eligible individual and the plan qualified: it covers an eligible individual's transactions with, or ownership of, the trust, and an eligible individual can be someone who at any time was a U.S. citizen or resident.^219,220,221 No IRS guidance names executors, and the revenue procedure's scope speaks of the eligible individual who would otherwise report.²²² The funds an account holds may be subject to the PFIC rules; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^172,173

A vested benefits policy is the other way to keep pension cover after leaving a fund: a special capital or annuity insurance contract, serving pension provision exclusively and irrevocably, with a supervised insurer or a public-law insurer.²²³ An employer can also use contributions to buy life or disability insurance for you, in place of a foundation, where you get an independent claim against the insurer.²²⁴ We did not read a real vested benefits policy; the ordinance states the form.

Not a trust: a contract with an insurer. This rests on legal form, and no IRS guidance names one.

Not a trust, and no IRS guidance names one, so this rests on legal form. The insurer holds the assets and owes a contract: a trust for U.S. purposes needs trustees who take title to property to protect or conserve it for the beneficiaries.¹⁷⁷ The Code treats insurance companies as corporations,⁵¹ and a Swiss insurer must be a stock company or a cooperative.⁵³ The bound assets that back policies protect a claim and give you no title.²²⁵

The strongest authority the other way is the private ruling that held a foreign pension entity a trust,³⁸ but a licensed insurer selling to the public is not a body for covered employees. A cooperative insurer still sells policies as an insurer.⁵³

Applies only to a trust; employer premiums for an annuity contract are §403(c) income when vested.

§402(b) reaches only an employer's contributions to an employees' trust,⁶⁴ and this is not a trust. Premiums an employer pays for an annuity contract are U.S. income to you under §403(c), taxed under §83,²²⁶ and much the same applies to the cash value and other rights under a contract with life cover.²²⁷

Not needed for a contract.

Not needed: §6048 reaches only foreign trusts.¹⁶⁹

No deferral: the saving clause keeps U.S. tax. Article 18(2) can reach an annuity bought for full value.

No deferral. A payout in consideration of past employment falls under Article 18(1), which keeps U.S. tax for a U.S. resident and, through the saving clause, for a U.S. citizen living in Switzerland.^136,139,140 Article 18(2) makes an annuity bought for adequate and full consideration, other than services rendered, taxable only where you live, under the same saving clause.²²⁸ Article 2 also covers the U.S. excise tax on premiums paid to foreign insurers, which Treasury says effectively exempts Swiss insurers, subject to an anti-conduit rule for reinsurance.^229,230

Nothing on Form 3520 or 3520-A for the policy.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts, and a policy is a contract.^169,163,166 Its U.S. income tax is not decided here.

Moves are not settled, and no IRS guidance addresses them. Money moved in from a pension fund or a vested benefits account goes on Part III for the money going out, unless you report it as compensation income, as a protective filing, on lines 24 and 27 for a part you owned. Money moved from a policy into an account is Part I for the money in; from a policy into a pension fund read as a §402(b) trust, nothing.^{88,165,169,99} Income tax is a separate question from these forms. Reading the move as a payout means U.S. tax that year on the amount above your basis, which is what has already been taxed to you and employer money that would not have been income if paid to you directly, but not contributions for work done, or earnings made, while you were a nonresident alien that no country taxed; reading it as locked means none now.^94,101,102 That is not settled, the forms don't decide it, and you should keep the records of what moved and what was taxed. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^172,173

This is compulsory for people living or working in Switzerland.²³¹ Employee and employer each pay 4.35% for old-age and survivors' insurance,^232,233 and the self-employed up to 8.1%.²³⁴ Pensions are set by a formula.²³⁵ The Swiss government's English says it runs on the pay-as-you-go system,²³⁶ and the money is not set aside.²³⁷

Not a trust: a pay-as-you-go social insurance scheme.

Not a trust. A trust for U.S. purposes needs trustees holding property for the beneficiaries,¹⁷⁷ and this scheme pays pensions from current income, not from a fund held for you.²³⁶ The point the other way: a federal institution holds and invests a reserve,²³⁸ which should not fall below a year's outlay.²³⁹ But the reserve backs the system, and no member has a share of it.²³⁵

Does not apply: there is no trust to contribute to.

§402(b) reaches an employer's contributions to an employees' trust,⁶⁴ and this scheme has no trust.²³⁶

Not needed.

§6048 reaches only foreign trusts.¹⁶⁹

The U.S. can tax it: Treasury says the treaty does not limit U.S. tax on Swiss social security.

Article 19(4) covers social security payments paid to a resident of the other country,²⁴⁰ and Treasury says Switzerland does not tax the benefit when it is the source country,²⁴¹ and that the convention does not limit U.S. residence-basis tax on it.²⁴² Double contributions are a matter for the separate U.S.-Swiss totalization agreement.²⁴³

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts, and this scheme is not one.^169,163,166 Form 8938 does not count a foreign government's social security.²⁴⁴ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^172,173

This is a voluntary pension contract for people with AHV-liable earnings,²⁴⁵ and only you pay in. By ordinance there are two forms: a policy with an insurer, which has its own block, and an agreement with a bank foundation.²⁴⁶ The second is what a bank calls a 3a account or a 3a securities account, and in law it is a special savings contract with the foundation, serving pension provision exclusively and irrevocably.²⁴⁷ The amounts are blocked until an insured event.²⁴⁸

For 2026 you may pay in up to CHF 7,258 if you belong to a pension fund, or 20% of earned income up to CHF 36,288 if you don't,^249,250 and from 2027 CHF 7,373 and CHF 36,864.²⁵⁰ The limit binds the contribution, not only the deduction, and the one provider's rules we read on this can send excess money back.^249,251 You may also make a buy-in for gaps up to ten years back, up to the same 8% of the upper limit a year, for gaps arising from 2025 on.^252,253

Payouts start at the earliest five years before the reference age.²⁵⁴ They come earlier on a full disability pension, a change to another kind of self-employment, or the cash-out cases of a pension fund,²⁵⁵ for a main home every five years,²⁵⁶ or on a move to another recognized form or a buy-in into a pension fund.²⁵⁷ The claim can't be assigned before it falls due, apart from a divorce, and it can be pledged for a home.²⁵⁸ Beneficiaries are set by law,²⁵⁹ and they have their own claim.²⁶⁰

Who holds title to the cash depends on the contract. The ordinance requires the money to sit in savings deposits at a bank,²⁶¹ and money the foundation does place in its own name counts as each saver's deposit for the Banking Act.^262,199 Real contract terms, not law, go both ways for cash. One foundation opens the account on the saver, who signs as holder and beneficial owner,²⁶³ and another opens a savings account in the saver's name with its founding bank.²⁶⁴ For securities, the terms we read put title in the foundation: one "acquires units in collective investments in its own name and for the account of the client",²⁶⁵ and another acquires equity interests "in its own name and on behalf of the Saver", through an account it opens "in its name".^266,267 Of the rules we read, one says U.S. persons "may not execute any equity investments",²⁶⁸ and another limits what a U.S. person can move out.²⁶⁹

Not settled: a savings contract, yet a foundation enforces the lock. Cautious: a foreign trust, cash included.

Not settled, and no IRS guidance addresses Pillar 3a. A U.S. trust is an arrangement whose purpose is to vest in trustees the responsibility for protecting and conserving property for beneficiaries who cannot share in that responsibility,⁴⁵ and federal law, not the Swiss label, decides.²⁰⁶

The argument that it is not a trust: the ordinance calls it a savings contract.²⁴⁷ The law treats each saver as depositor,^262,199 and the Swiss government's English describes a bank savings account on the savings-bank principle.²⁷⁰ For cash the foundation manages nothing beyond a rate its board sets,²⁷¹ and a plain deposit is not a trust. The closest IRS ruling holds that an arrangement whose title-holder only holds and transfers title at the owner's direction is not a trust,²⁰⁸ although Mexican law compelled the bank's role there,²⁷² so being put in place by law does not make a trust by itself. A pledge for a home does not point the other way: in that ruling the holder had to grant a security interest on request.^209,258 For cash we read this argument as at least as strong as the other.

The argument that it may be one: Swiss law puts a separate foundation between you and the bank, and it is taxed like a pension fund.²⁷³ It can't be directed to pay: it pays only on listed events.^254,255 That ruling does not apply where the holder does more than hold title,²¹⁰ and for securities the foundation holds title on the terms we read, applies the pension investment rules,²⁷⁴ and under one foundation's rules its board of trustees looks after its business, asset management included.²⁷⁵ An arrangement's purpose matters most,³⁵ and the purpose here is pension. Members choosing investments did not stop a fund being ruled a trust, though that fund was organized as one with a trustee.⁴⁴

Two official lists name these arrangements for other purposes: Announcement 2025-8 for the treaty's dividend article,²⁷⁶ and the 2024 FATCA agreement for bank reporting.²⁷⁷ Neither classifies them for §6048.

With the question open and the penalty for a missing Form 3520-A large,⁵⁷ this guide takes the cautious course of treating it as a trust, in cash and securities alike, and a foreign one.^58,59

Does not apply: only you pay in.

§402(b) reaches only an employer's contributions to an employees' trust,⁶⁴ so it does not apply to a contract only you pay into. On our reading, an employer that adds money pays it as pay to you, the contract party.²⁴⁹

Whether a move between foreign plans is taxable is not settled. IRS officials told GAO, in a report that is not IRS guidance, that the IRS "generally considers routine administrative transfers of retirement assets that occur between or within foreign retirement plans to be distributions to the participant and therefore taxable income",⁷⁹ and also that transfers "may be taxable", depending on your control and on "a substantial limitation or restriction", which a penalty tax on early withdrawal "could be".^80,81 The first statement rests on transfers implying "some access to and control over" the money.⁸² GAO's Swiss appendix says that on a move to a vested benefits institution the plan "mandatorily transfers" the assets,⁸³ and when you join a new fund Swiss law makes the old fund send your exit benefit.¹⁵ Against that, IRS officials also said money can become technically available "even though the individual takes no action to access the funds",⁸⁴ and that "there is no way that the plan can structure the transfer" to avoid a distribution.⁸⁵ A 3a move is your own choice,²⁵⁷ so the point about a compelled move does not help here. Income tax is a separate question from these forms. Reading the move as a payout means U.S. tax that year on the amount above your basis, which is what has already been taxed to you and employer money that would not have been income if paid to you directly, but not contributions for work done, or earnings made, while you were a nonresident alien that no country taxed; reading it as locked means none now.^94,101,102 That is not settled, the forms don't decide it, and you should keep the records of what moved and what was taxed.

Rev. Proc. 2020-17: possible, not settled. Leaving Switzerland is not among its examples.

Rev. Proc. 2020-17 exempts an eligible individual, which takes having reported the income each year on a U.S. return,⁹⁸ for a retirement trust that meets its conditions.¹⁰⁹ A foundation account points toward several of them. It is tax-favored: contributions are deductible, the foundation is taxed like a pension fund, and claims are not taxed before they fall due.^{249,273,112,113} Benefits are certified to the tax authorities for each tax period, contributions are certified to you for your return, and contract models are filed with the Federal Tax Administration.^114,278,279 A year with no payout may produce nothing for the tax authorities, so the yearly reporting condition is arguable, under its words "otherwise available".¹¹⁶ Only employees and the self-employed may pay in,²⁴⁹ which we read as meeting the earned-income condition.¹¹⁸ People on Swiss unemployment benefit may also pay in,²⁴⁵ and only the proposed regulations make an allowance for that.²⁸⁰ The employer condition does not apply to a plan no employer maintains.¹²⁹

Contributions are limited by a percentage of earned income or a set amount.^249,120 CHF 36,288 is $45,818 at the Treasury rate for December 31, 2025, and CHF 7,258 is $9,164.²⁸¹ In one case the total for one person could pass $50,000: someone with no pension fund who pays the full CHF 36,288 and a full buy-in pays CHF 43,546 in one year, $54,982 at that rate. Buy-ins cover only gaps from 2025 on,²⁵³ so the first falls in 2026, and the rate that counts is the one for December 31, 2026, which is not yet published; at 0.871 francs to the dollar or more the total stays at or under $50,000. We read the buy-in as limited on its own terms, since the 20% is a percentage limit and the buy-in has its own annual cap,²⁵² so the condition is met, but a strict reading that adds them could fail it for that person.

The main open condition is payouts.¹²⁴ Retirement age, disability and death fit, and buying a home is among the reasons it accepts.^256,126 But you can take the whole balance on leaving Switzerland for good, and on our reading with no penalty,^255,43 since a lump sum has its own lower Swiss rate.¹²⁷ Moving abroad is not among its examples. "Such as" is not a closed list, and leaving takes proof and a spouse's written consent;²⁸² but the examples are needs. With no IRS guidance on Pillar 3a, whether Rev. Proc. 2020-17 covers it is possible but not settled, so the answers above stay at File.

The proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹³¹ say that "Generally, only contributions with respect to income earned from the performance of personal services are permitted (with allowances made for limited contributions made by unemployed individuals)."²⁸⁰ Their own annual limit is $75,000 (adjusted for inflation from 2026), at the Treasury rate for July 1 of the year,^283,132 so the CHF 43,546 passes under it: it is $54,982 at the December 2025 rate, and at 0.581 francs to the dollar or more it stays under $75,000. They don't help on payouts, where the text has the same words.¹³³

No deferral: the saving clause keeps U.S. tax. A U.S. resident can reclaim Swiss tax withheld on a lump sum.

No deferral. No article defers U.S. tax on the account or relieves contributions. Article 18(1) makes a pension in consideration of past employment taxable only where you live, lump sums included,^136,137 and Treasury says the term reaches private arrangements, even an IRA,²¹⁶ so on our reading it can reach a payout here, though that is not settled for someone who paid in while self-employed. It matters only for Swiss tax: the United States taxes a U.S. resident on it,¹³⁸ and the saving clause keeps a U.S. citizen living in Switzerland taxed.^139,140,141

The treaty has no rule on moves between plans. Treasury says Article 28(4) leaves out the U.S. Model's exemption from tax on rollovers from one plan to another,¹⁴⁵ and it describes Article 18 as reaching amounts paid.¹⁴⁶ Treasury officials told GAO few treaties address this.¹⁴⁷

A lump sum to someone living abroad always has Swiss tax taken,¹⁴⁸ and a U.S. resident can reclaim it within three years with a confirmation from the U.S. tax authority.¹⁴⁹ The Federal Tax Administration's table for the United States reads: no withholding on Pillar 3a pensions, and a refund on lump sums.¹⁵⁰ Tax you could reclaim is not a creditable tax.¹⁵¹ A U.S. citizen living in Switzerland has no such refund, and the treaty allows the U.S. credit, subject to the limitations of U.S. law.¹⁵² Watch the timing: on this course the United States taxes the income each year, and Switzerland taxes the whole payout,^167,153 so the two can fall in different years. Form 8833 is waived for pensions.¹⁶¹ The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹⁶² A green card holder whom the treaty's tie-breaker makes a resident of Switzerland is still treated as a U.S. resident for other purposes, so the cautious course is to keep filing unless you rely on the proposed regulations.^156,157,158

On the cautious course, full reporting, as for a foreign trust you own.

On the cautious course, you report it as a foreign trust you own: you funded it for yourself and its income is held for you,^78,77 so Part II and Form 3520-A are due each year,¹⁶³ and payouts go on Part III, lines 24 and 27, as payouts to an owner.^166,165 Each contribution you make as a U.S. person is a Part I transfer,¹⁶⁹ and one made within 5 years before your U.S. residency started is treated as made on your residency starting date and goes on Part I for that year.¹⁷⁰ Part I also applies at your death as a U.S. citizen or resident, if any part of the account is then treated as owned by you or is in your gross estate: your executor reports it, whether or not the executor is a U.S. person.²¹⁷ If the foundation does not file Form 3520-A, you attach a substitute to your Form 3520.¹⁶⁸ No Form 4970, because the income is taxed to you each year.¹⁶⁷