Low interest rates at an all-time low and steadily rising life expectancy are placing a huge strain on the first and second pillars of the Swiss pension system. Falling conversion rates are reducing pension payouts. This makes it all the more important to start putting money aside in a private pension as early as possible. Pillar 3a is the ideal place to start.
Anyone in paid employment can significantly reduce their tax bill by making voluntary payments into a Pillar 3a private pension. If they pay the maximum amount into Pillar 3a by the end of the year, they can save up to several hundred francs.
The maximum amount has been adjusted this year. The maximum amounts for Pillar 3a vary from year to year. You can find the current relevant amounts here.
Tax deduction limits for payments into Pillar 3a by December 31, 2023 at the latest:
Tax deduction limits for payments into Pillar 3a by December 31, 2022 at the latest:
If you start paying in the maximum statutory amount every year from the age of 35, you can save around CHF 40,000 in taxes by the time you reach retirement. For the self-employed, it can be CHF 300,000 or more.
Every franc you pay in is paid out when you retire and taxed at a special, lower rate. With questions being asked about the future of Swiss pensions, there's no disputing that Pillar 3a makes good sense.
Everyone's pension situation is different. Analyze yours together with an AXA expert to answer these questions:
The purpose of Pillar 1 is to secure livelihood in retirement, in the event of disability and incapacity to work, or after a death.
Pillar 2 includes occupational pensions, occupational accident insurance, daily sickness benefits insurance, and the vested benefits institutions. It's intended to enable people to maintain the standard of living they're accustomed to after retirement.
By making voluntary payments into a tied (Pillar 3a) or flexible (Pillar 3b) pension, you can close any income gaps from Pillars 1 and 2 of the Swiss pension system to the fullest extent possible.