How to maximise the benefits of pillar 3a

Bank instead of insurance

Do not purcha­se 3a insuran­ce. Any insuran­ce needs you may have can also be insu­red out­side the 3rd pil­lar without any pro­blems. With a bank or fund solu­ti­on you remain much more fle­xi­ble, can easi­ly open addi­tio­nal accounts, trans­fer them to ano­t­her pro­vi­der if necessa­ry and final­ly make stag­ge­red with­dra­wals. All this and more is eit­her not pos­si­ble with an insuran­ce poli­cy or only pos­si­ble to a very limi­ted extent.

Do not deposit if you earn little

A depo­sit into the 3rd pil­lar is most worthwhile when you are ear­ning 100%. Then you save the most taxes. If you earn litt­le or not­hing in a year, you should not pay into pil­lar 3a. You will pro­bab­ly pay litt­le tax any­way becau­se you have worked rela­tively litt­le. So you bene­fit very litt­le from the tax deduc­tion.

This point is important becau­se you will always have to pay a redu­ced tax when with­drawing the depo­si­ted amounts, regard­less of how much you have saved on your depo­sit. If you only make a depo­sit if you can actual­ly save tax with a depo­sit, you will get more out of your 3rd pil­lar.

Set up several 3a accounts or custody accounts

When you draw reti­re­ment assets, you pay a redu­ced tax, which is pro­gres­si­ve, simi­lar to the inco­me tax. This implies that the tax is not only hig­her in Swiss francs and cen­ti­mes for hig­her amounts, but also in per­cen­ta­ge terms. Sin­ce all lump-sum bene­fits from the 2nd and 3rd pil­lar are added tog­e­ther in the same year, it is advi­s­able to with­draw reti­re­ment assets in sta­ges over several years. Howe­ver, in order to be able to with­draw reti­re­ment assets in sta­ges, you must start buil­ding up several 3a accounts or custo­dy accounts now. 3a accounts can­not be split up retroac­tively. They can only be with­drawn “en bloc”.

Start early with the 3rd pillar

The ear­lier you start with the 3rd pil­lar, the more you bene­fit. Once you have mis­sed a pay­ment, you can­not make up for it. This is rele­vant becau­se with Pil­lar 3 you can save tax not only when you make your depo­sits, but also during the enti­re peri­od until you with­draw. This is becau­se you do not have to pay wealth tax on your reti­re­ment assets. Sin­ce you do not have to decla­re the reti­re­ment assets in your tax return, the inco­me is also tax-free. This allo­ws the com­po­und inte­rest effect to take full effect.

Invest in securities

In con­trast to free assets, the 3rd pil­lar remains tied up in the long term. Only in a few excep­tio­nal cases can the money be with­drawn befo­re reti­re­ment. The invest­ment hori­zon is the­re­fo­re extre­me­ly long for many 3a savers. Becau­se this is the case, 3a money can be inve­sted in secu­ri­ties. Even seve­re finan­cial cri­ses can be over­co­me unsca­thed. In the long term, secu­ri­ties offer a signi­fi­cant­ly hig­her return than 3a accounts, which hard­ly yield any inte­rest.

Compare fees

If you want to invest your 3rd pil­lar in secu­ri­ties, you should defi­ni­te­ly com­pa­re the fees of pen­si­on funds. After all, it is of abso­lute­ly no use to you if you take on more risks but the tar­ge­ted addi­tio­nal return is wiped out by exces­si­ve fees.

Better to withdraw pension fund instead of 3rd pillar

If you do not have enough free funds to buy a hou­se or apart­ment, you can draw money from the pen­si­on fund. This rai­ses the que­sti­on of what makes more sen­se to draw from the pen­si­on fund or the 3rd pil­lar?

Pledging instead of withdrawing

Advan­ce with­dra­wal when buy­ing your own home: If you have inve­sted your 3rd pil­lar in funds, it is inte­re­sting to pledge the 3rd pil­lar ins­tead of with­drawing it. In the long term you will pay less mor­tga­ge inte­rest than you can earn returns.

Paying in beyond the ordinary retirement age

If you are employ­ed beyond the ordi­na­ry reti­re­ment age, it may be inte­re­sting to con­ti­nue pay­ing into pil­lar 3a. The 3rd pil­lar can be con­ti­nued for up to five years beyond the regu­lar reti­re­ment age. If you have inve­sted your 3a money in funds, you can extend your invest­ment hori­zon by up to five years.

Pillar 3 withdrawal before the pension fund

Make sure that you do not draw Pil­lar 3 in the same year as the pen­si­on fund. We have deve­lo­ped a model for stag­ge­red pay­ment that shows an opti­mal pay­ment sche­du­le.

writ­ten on 11.05.2020


Cur­r­ent­ly, fin­pen­si­on offers solu­ti­ons for vested bene­fit savings with secu­ri­ties and indi­vi­du­al manage­ment pen­si­on plans 1e. A 3a secu­ri­ties app is under deve­lo­p­ment.