Pension · Switzerland
Swiss Pillar 2 (BVG/LPP) & U.S. tax
How the Swiss occupational pension (2nd pillar) is reported to the IRS, and the areas that are genuinely unsettled.
By Danilson Ramos · Founder, Atamatax
Published July 2026 · Updated September 2026
Part of the Switzerland desk — every US tax topic for Switzerland in one place.
Check it for your own accounts
Do you need to file an FBAR?
Three questions, no balances typed, no email. The read explains the aggregate rule — the part most people get wrong — and what would settle the rest.
Free, no account, nothing you answer leaves this page. Open the full FBAR / Form 8938 checker
A threshold screen, not a filing determination. Three answers cannot establish whether a specific account is reportable; the full checker and the account's own terms can.
The Swiss 2nd pillar (occupational pension, BVG/LPP) is mandatory for most employees. Its U.S. tax treatment is one of the more genuinely unsettled areas for Americans in Switzerland — so this page separates what's clearer from what's contested.
Reporting (clearer)
- A 2nd-pillar account is generally a reportable foreign account — on the FBAR if your combined non-U.S. accounts exceed $10,000 at any point.
- And on Form 8938 if you cross the higher abroad thresholds ($200,000 / $300,000 single; $400,000 / $600,000 married filing jointly).
U.S. taxation of the 2nd pillar (contested)
How the U.S. taxes 2nd-pillar contributions and in-plan growth is debated and fact-specific. Commentary ranges from treating it like a foreign pension or trust to other positions, and the U.S.–Switzerland treaty interacts here. This is not settled by a single IRS ruling, and it's an area to get a professional opinion on rather than assume.
The PFIC angle
Unlike a fund-based 3a, a standard 2nd pillar is typically a defined arrangement rather than you holding named funds — so it usually isn't a per-fund PFIC problem the way an invested 3a is. Confirm how your specific plan is structured.
Start with what you have to report
Check whether your 2nd-pillar and other accounts cross the FBAR and Form 8938 thresholds. This is general information, not individualised tax advice.
Authorities cited
- FinCEN Form 114 (FBAR) — Report of Foreign Bank and Financial Accounts (FBAR)
- 31 CFR §1010.350 — 31 CFR §1010.350 — FBAR (FinCEN Form 114) filing requirement and $10,000 threshold
- IRS Form 8938 — About Form 8938 — Statement of Specified Foreign Financial Assets
- IRC §6038D — IRC §6038D — Information reporting of specified foreign financial assets (Form 8938)
- IRC §6048 — IRC §6048 — Information reporting for foreign trusts (Forms 3520 / 3520-A)
- US–Switzerland Income Tax Treaty — Convention between the United States and Switzerland (income tax treaty + protocol)
Primary sources (Cornell Legal Information Institute for the US Code and CFR; IRS.gov for forms, procedures, and treaty documents). This page is general information, not individualized tax or legal advice.
Atamatax provides tax preparation support and educational resources. This website does not constitute legal or tax advice.