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.

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.

Don't assume the Swiss tax deferral carries over. Whether U.S. tax applies to 2nd-pillar growth before payout is contested — flag it, don't guess.

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. Atamatax is tax-preparation software, not a CPA firm, and this is not individualised tax advice.

Check my FBAR & 8938 thresholds

This is educational, not advice — and the U.S. taxation of the Swiss 2nd pillar is genuinely unsettled. Confirm your position with a qualified professional before filing.

Atamatax provides tax preparation support and educational resources. This website does not constitute legal or tax advice.

Frequently asked questions

Do I report my 2nd pillar on the FBAR?

Generally yes, if your combined non-U.S. financial accounts exceeded $10,000 at any point in the year, and on Form 8938 if you cross the higher abroad thresholds. Reporting is clearer than the underlying U.S. tax treatment.

Is my Swiss 2nd pillar taxed by the U.S.?

This is contested and fact-specific. Commentary varies on how contributions and in-plan growth are treated, and the U.S.–Switzerland treaty interacts. It's not settled by a single IRS ruling, so get a professional opinion rather than assuming the Swiss deferral carries over.

Is a 2nd pillar a PFIC?

Usually not a per-fund PFIC issue like an invested 3a, because a standard 2nd pillar is typically a defined arrangement rather than named fund holdings. It depends on how your specific plan is structured.