Several Pillar 3a accounts and policies: Save on taxes through splitting

Several Pillar 3a accounts or policies offer you the opportunity to optimize your pension provision and save on taxes on payout in addition to OPA and your pension fund. We show how splitting works, how many 3a solutions make sense, and what the advantages are. 

A well-thought-out pension strategy and clear structure of your Pillar 3 plan can make a noticeable difference when it comes to payouts in old age. Those wanting to optimize their pension provision often ask whether it’s possible to have several 3a solutions. If you have or are planning several Pillar 3a accounts or policies in particular, it’s important to review your pension strategy regularly and amend it if necessary.

What advantages do several Pillar 3a accounts or pension solutions offer?

• Pillar 3a withdrawals in stages (splitting): 3a assets must be withdrawn in full per account or pension policy (no partial withdrawals). Several 3a solutions enable payouts to be spread out over several years which optimizes tax planning.
• Flexible withdrawal from Pillar 3a: Payments are possible between five years before and five years after retirement age (deferral only if you are in continued gainful employment). This makes it easier to adapt the payment to your personal situation.
• Save on taxes with a Pillar 3a payment: Lump sum payments are taxed progressively. Several smaller withdrawals result in a lower tax burden than a one-time, large payout. In our article on withdrawing Pillar 3a, we show you what you should bear in mind and what tax rates currently apply.
• Continue investing: If you do not withdraw all of your 3a assets, the remainder remains in place. This way, you can continue to earn interest or – with a securities solution – take advantage of additional return opportunities
• Protecting your assets: the level of protection of your 3a assets depends on the provider. For bank accounts, balances of up to CHF 100,000 per person and bank are privileged under bankruptcy law in the event of bankruptcy, which is why it’s worth distributing larger balances among several banks. With pension solutions, your assets are fully protected by what is known as the coverage pool (security assets prescribed by law) – which is unlimited by amount. 

Can I switch my account or Pillar 3a policy?

If you already have a 3a account or a 3a policy but would like to change provider or product, you can do so at any time. When switching, the entire 3a assets will be transferred to the new provider. It is not possible to make a partial transfer of the assets or transfer to a normal savings account.

Switching to a different Pillar 3a account or a pension solution can be worthwhile in particular if you are benefiting from better conditions and lower fees. Please note that, depending on the provider, notice periods or fees may apply. 

Are there restrictions with regard to several Pillar 3a solutions?

Several Pillar 3a accounts or policies offer advantages for tax planning, but are subject to clear legal conditions:

Maximum amount paid in remains limited

• The annual maximum contribution into Pillar 3a is defined by law.
• This amount applies per person, regardless of the number of accounts or pension solutions.
• Deposits can be spread over several accounts, but the total cannot be exceeded.

Tax aspects for married couples

• Married couples are taxed jointly on Pillar 3a lump sum payments (provided they do not live separately).
• Due to tax progression, withdrawals made in the same year may result in a higher tax burden.
• Coordinated planning of payments can be advantageous for married couples in particular.

How many Pillar 3a solutions are advisable?

In practice, two to three accounts or policies are advisable for most savers. The number of Pillar 3a solutions that make sense depends on your savings history, the capital you have saved, and the tax treatment in your canton.

2 to 3 accounts: makes sense for many savers

For most people, two to three accounts or policies for Pillar 3a are sufficient to take advantage of the benefits.

This allows you to spread your assets over two to three years and reduce your tax progression. This option is particularly suitable for total 3a savings of up to CHF 150,000.

How do you benefit from several 3a solutions?

If you split your Pillar 3a account over several accounts, you can withdraw your pension capital on a staggered basis, save on taxes, and structure your planning more flexibly.

You should therefore plan early and adjust the number of accounts/Pillar 3a solutions to your personal situation. This enables you to get the most out of your private pension provision.

Further questions on several Pillar 3a solutions