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The 3rd pillar – private pension plans

Pension plans: Besides the state AHV (1st pillar) and occupational pensions (2nd pillar) you can also save for your retirement by contributing to a private pension plan (3rd pillar).

Paying into the 3a pillar for 2021:

maximum 6'883 francs

There are two different private pension plans, the 3a pillar and 3b pillar:

  • 3a pillar – restricted private pension plan for persons earning an income:
    Contributions are tax-deductible up to a set amount. This is a restricted pension fund, so you cannot take your savings out any time you like
  • 3b pillar – free / unrestricted pension plan for everyone:
    There is no limit to the amount you can pay into this plan. The 3b pillar pension plan gives you fewer tax advantages than the 3a pillar restricted plan.

Paying into the 3a pillar – Maximum annual contributions

Anyone earning an income can pay a set amount into the 3a pillar pension plan with their bank or insurance company. This amount can be deducted from your taxable income in your tax return. A distinction is made between:

  • people without an occupational pension plan (generally self-employed), who can pay in a higher amount or
  • people already paying into an occupational pension plan (generally employed).

The maximum amount that can be paid in is set each year by the Federal Social Insurance Office and published on its website. In 2021 employed persons with an occupational pension plan can pay a maximum of CHF 6'883 into the 3a pillar. Self-employed persons without an occupational pension plan can pay in up to 20 % of their annual earned income, but a maximum of CHF 34'416.

The annual contribution must be booked into the relevant pension account by the end of the year in question. Be sure to take account of the holidays and make the payment in good time. Detailed information can be obtained from your pension fund or your bank/post office).

Pensioners who continue to work can still pay into a pension plan up to five years after reaching the official retirement age.

You can still pay in the maximum deductible amount even if you are unable to work for a time (e.g. due to military service, unemployment etc.).

You do not have to pay wealth tax on your pension plan savings. Nor do you have to pay income tax or withholding tax on interest and capital gains.

3rd pillar withdrawals

You can only withdraw money from a 3a pillar pension plan before reaching retirement age if you want to use it to buy or build a residential property, go abroad to live permanently, or set up your own business.

You can also withdraw your savings if you are unable to work and you draw full invalidity benefit.

You are required to withdraw the accumulated pension capital on retirement (or no earlier than five years before reaching the official retirement age). If you continue to work, it is possible to continue to contribute and/or to postpone the withdrawal for a maximum of five years. Contact your third pillar scheme for the amount of money saved and the terms of withdrawal.

There are no special conditions regarding 3b pillar private pension funds.

If you withdraw funds from a 3rd pillar pension plan before you reach the official retirement age, these will be taxed at a much lower rate and separately from other income. There is a one-off tax which corresponds to the amount that you would pay in one year on this income, however, it is calculated at a reduced rate..