All about Pillar 3a: Why you shouldn’t delay your private pension provision

Martin Müller

Because you can only make a 3a tax deduction next year if you have deposited it to the bank or insurance company before the end of the year. To ensure this, you should make your transfer by mid-December at the latest, as there may be delays during holiday periods.

Absolutely, as long as you can do it for basically no money until you retire. The government subsidizes pension provision through tax deductions and you should benefit from this. If there were no tax advantages, they would be more profitable vehicles in the long run. Correct: The money is blocked until retirement as the price of the tax advantage; In some cases, you can use it in advance, for example, to buy an apartment.

NO. The prerequisite is that you are employed or self-employed in Switzerland. Anyone receiving unemployment benefits from RAV is also considered an “employee” and is allowed to make payments, but not domestic workers, people receiving benefits, and IV retirees without additional income.

The maximum amount this year for anyone making contributions to the pension fund (PF, second column) is 7,056 francs. This is true regardless of workload; Part-time employees are also allowed to pay the full amount. Net salary must be higher than 3a deposit. Anyone not affiliated with the PK, such as the self-employed, low-paid workers or retirees who continue to work, is allowed to pay 20 percent of their net income, up to a maximum of 35,280 francs per year.

It doesn’t matter, you can deposit less money. The higher your income, the greater the tax advantage. But the reduction in lower taxes is especially pronounced among low-income people.

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You can, but it’s not worth it. Each of your two 3a banks will give you a confirmation, but if you claim both deposits for tax purposes, the tax office will ask you to cancel one of them. And if you claim a deduction of only 6,000 francs, even though you secretly paid 6,000 francs to two banks, you will be penalized when you pay it out later at retirement age: then you will have to pay tax on 12,000 francs. You can make a deduction even though you have only paid 6,000 francs; This is a damages agreement.

This depends on your income and the tax rate where you live. As a general rule, this is between a quarter and a third of the amount paid, so for many people it is a four-figure amount. You can deduct your entire 3a payment from your taxable income. You shift to a lower tax rate due to progress.

Yes, but until then the 3a money is tax free assets and the income is also tax free. First, the payment is taxed regardless of your remaining income and assets, and second, a reduced tax rate applies. But the important thing is that when making the payment, all pension funds in the second column (pension fund) and column 3a paid in the same calendar year are brought together, and in the case of married people this is often the case. cantons and partner cantons as well. To reduce the tax burden, it makes sense to create several 3a accounts (see next question) and place the 3a payment in a different calendar year than a possible payment from PF (does not apply to lump sum withdrawals only). It doesn’t matter as a pension).

You can withdraw 3a money five years before retirement, that is, starting from the age of 60. You can only leave 3a money after the normal retirement age of 65, if you continue to work until the age of 70 at the latest.

This is not allowed, you need to close the 3a account completely. However, you are allowed to have multiple 3a accounts at the same time, pay into them alternately, and then close them one after the other. This way you can make the payment gradually. You won’t save tax this way in all cantons, but since you don’t yet know for sure which canton you’ll live in when you retire, it definitely makes sense to open several 3a accounts. You should open a new one when you have around 50,000 francs in your retirement account at the latest.

3a You can either deposit your money in a bank or get insurance. In the second solution, only part of your deposit goes towards retirement provision. With the rest, you pay the broker’s commission and, for example, disability insurance premiums. It is doubtful whether it is even needed. And this type of insurance is expensive, not transparent, and not flexible if, for example, something changes in your life situation. Also, unlike the banking solution, you have to pay the same amount every year for insurance. We therefore recommend against 3a insurance.

You don’t have to do this either. There are numerous offers where money is invested in securities funds. In the long run this provides a significantly better return, but you also run the risk of having to accept a decline in the stock market from time to time. This is a manageable situation as the money is ideally invested over decades. It is best to look for a provider with passive funds: they are much cheaper than active ones and are often just as profitable in the long run. With online providers such as Viac, Frankly or Finpension you get much cheaper costs than with traditional banks, which has an advantageous effect in the long run.