Families have a host of costs to cover: childcare, maintenance, housing costs ... Pillar 3 savings offer you a simple way to save.
With ongoing costs to cover, families need to put aside as much as they can. At the same time, there is a growing desire to provide for the long-term future of children and partners. Pillar 3a is an excellent way for families to save and provide for their loved ones at the same time.
Pillar 3 enables you to make private provision for your old age. Designed to be used alongside the AHV state pension (Pillar 1) and occupational pension schemes (Pillar 2), it is also a popular means of financing home ownership. Pillar 3 is a way of encouraging individuals to save for their old age. What does private pension provision consist of? Pillar 3 can be subdivided into Pillars 3a and 3b:
Pillar 3a private pension provision works as follows: First, you pay in a predefined contribution. You can then deduct your Pillar 3a contributions from your taxable income for purposes of direct federal, cantonal, and municipal taxes. You can easily reduce your tax bill by several hundred francs, depending on how much you earn and where you live.
The answer will differ depending on whether you are a salaried employee or self-employed and whether or not you are in a pension scheme. The maximum contributions are as follows:
The Federal Social Insurance Office sets the precise amounts that can be contributed to private pension provision on an annual basis. The annual contribution must be credited to the pension account by the end of each year.
The following also applies to the relevant parent who is making contributions: Pillar 3a savings are withdrawn in full at the time of retirement, or at the earliest, five years before reaching the reference age (formerly: normal retirement age). Early withdrawals are only possible in exceptional cases under the following circumstances:
If you withdraw your Pillar 3a capital, a flat-rate tax charge will be applied separately from your other income and at a significantly lower rate. You should nevertheless bear in mind that the tax on your capital payout will increase progressively with the amount of capital. It may therefore even make sense to invest in multiple 3a solutions to enable you to spread the payout over several years.
Anyone who is gainfully employed – including career starters and apprentices – can make private provision for their old age and pay into a Pillar 3a scheme. Payments into a Pillar 3 solution can start at any time during the current calendar year in consultation with the relevant pension fund.