One-stop pension provision and risk coverage Private pension provision

The maximum amount for Pillar 3a tax deductions is adjusted annually. For 2023/24 it was as follows:

Employees: a maximum of CHF 7,056

Self-employed individuals with no pension fund: a maximum of CHF 35,280

The federal government supports Pillar 3 with attractive tax benefits, enabling you to make massive tax savings as well as provide for the future.

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 has reached age 60 when the amount is redeemed.
  • The policy is redeemed at the earliest after five years.
  • The policyholder and the insured are identical.

• Earnings (interest and bonuses) are exempt from income tax during the term.

Pillar 3 is ideal for saving money and providing for the future.  A distinction is made between  tied 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. You can offset these contributions against your tax 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 This capital can be withdrawn at any time, but is not subject to any tax advantages.

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 blog Building up a pension – a comparison of banks and insurance companies .