Frequently asked questions
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How do I pay into Pillar 3?
The maximum amount for Pillar 3a tax deductions is adjusted annually. For 2025 it is as follows:
- Employees: a maximum of CHF 7,258.
- Self-employed individuals with no pension fund: a maximum of CHF 36,288.
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How can I save on tax with a private pension plan?
The federal government promotes saving under Pillar 3 by providing generous tax advantages, letting you save significant amounts on taxes while building your nest egg.
Pillar 3a in particular is considered to be a sensible measure for tax optimization and therefore saving.
Tax advantages of Pillar 3a:
- The annual premium is deducted from your taxable income (up to the legally defined maximum amount).
- Earnings (interest and bonuses) are exempt from income tax during the term.
- Lump-sum payouts are taxed at a reduced special rate.
Tax advantages of Pillar 3b:
- Periodically financed, endowment life insurance is exempt from income tax. Provided the following conditions are met, the same applies for life insurance financed by a single premium:
- The policy was signed before the insured's 66th birthday.
- The insured was 60 when the lump sum was paid out.
- The policy pays out after five years at the earliest.
- The policyholder and the insured are the same person.
- Earnings (interest and bonuses) are exempt from income tax during the term.
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What's the difference between Pillars 3a and 3b?
Pillar 3 is ideal for saving money and providing for the future. A distinction is made between restricted pension provision (Pillar 3a) and flexible pension provision (Pillar 3b): Generally speaking, we recommend a combination of the two.
- Pillar 3a aims to provide sufficient income in old age and is subject to legal provisions regarding annual incoming payments and the date of the payout. It can only be financed with premiums. However, the law permits only a limited amount to be paid into the plan each year. These contributions are tax deductible up to the maximum amount, although you can only draw them before retirement subject to certain conditions. Reasons for early withdrawal include the purchase of residential property, leaving Switzerland for good or drawing a full disability pension.
- Pillar 3b is flexible regarding the term, beneficiaries and amount paid in. It can be financed with premiums or with a single payment. This capital can be withdrawn at any time, but there are no tax advantages.
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Why should I opt for private pension provision from an insurance company?
By opting for Pillar 3 from an insurance company, you are protecting yourself and your loved ones in the event of disability and death. In addition, with private pension provision from an insurance company, you are committed to making regular payments up to retirement age, which has a positive effect on the capital you accumulate as well as a compound interest effect. The differences are explained in detail in our article Building up a pension – a comparison of banks and insurance companies.
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Do you have any questions, or would you like a no-obligation pension consultation? Our experts are there for you.
Further information to help you plan your financial future
The three-pillar system: a simple explanation
The purpose of the three-pillar pension system is to provide financial security for people in Switzerland in old age and in the event of disability or death.
Pillar 3 – private pension provision
By making voluntary payments into restricted pension provision (Pillar 3a) or flexible pension provision (Pillar 3b), you can close income gaps from Pillars 1 and 2.
Tips for private pension provision with equities
Those who want to build their savings for retirement reliably and sustainably will fare best with targeted investments in diversified shares.