What happens to the pillar 3a assets in the event of death? In this article, we explain the pillar 3a beneficiary rules and show how surviving dependants should proceed.
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What happens to pillar 3a in the event of death?
The pillar 3a assets of a deceased person are not included in the estate. It is paid out directly to the beneficiaries as a lump sum. This takes place outside the regular inheritance process and without the consent of the other heirs.
Although Pillar 3a is not part of the estate, its value is added to the estate when calculating the compulsory portions (Art. 476 ZGB). This serves to protect the heirs entitled to a compulsory portion. This means that the compulsory portions cannot be circumvented by the pillar 3a.
Order of beneficiaries
What happens to a deceased person’s pillar 3a is not governed by inheritance law, but by the Ordinance on the Tax Deductibility of Contributions to Recognised Pension Plans (Art. 2 BVV 3). If you wish to change the 3a beneficiary order, you cannot do so by means of a will or inheritance contract. You can only specify who falls into group 5 in a will or inheritance contract.
The order of beneficiaries is divided into five groups and structured like a cascade. Only one group is taken into account for the 3a payout in the event of death. Group 2 therefore only receives the payout if there are no beneficiaries in group 1, group 3 only if there are no beneficiaries in groups 1 and 2, etc.
| Group 1 | The surviving partner from the marriage or registered partnership |
| Group 2 | Direct descendants Life partner:in, with whom a cohabitation existed continuously for the last 5 years until death Person who is responsible for the maintenance of one or more joint children Persons substantially supported by the deceased person |
| Group 3 | Parents |
| Group 4 | Siblings |
| Group 5 | The other heirs |
Can I change the order of beneficiaries?
The following adjustments to the 3a beneficiary order are possible by law during your lifetime :
- The entitlements of persons from groups 2 to 5 can be specified precisely. You can say who should receive how much within the respective group (specify proportions, e.g. 75% for the partner and 25% for the child). The total must add up to 100%.
- The order of beneficiaries from group 3 to 5 can be changed.
As a rule, a written notification to the pillar 3a provider is required to change the order. Ask your 3a provider directly what you need to do.
With the finpension 3a pension foundation, you can find the pillar 3a beneficiary regulations in the app under “Documents” and then “Forms”.
Pillar 3a in the event of death for spouses & cohabiting partners
The surviving spouse always receives the payout of the deceased person’s entire 3a assets. The same applies to registered partnerships.
The conditions for payment are stricter for cohabiting partners. At least one of the following conditions must be met for a cohabiting partner to fall into Group 2:
- You must have been living with the deceased for at least five years at the time of death.
- The deceased person was largely responsible for your living expenses.
- They pay for joint children.
Are none of the requirements met? Beneficiary status for pillar 3a is still possible if the deceased person made such a provision during their lifetime. To do this, the partner must have been named as an heir in the will or inheritance contract. He or she then falls into group 5, the order of which can be specified in writing. The only prerequisite for this is that there are no persons in groups 1 to 2.
When do children receive a pillar 3a payout in the event of death?
Children of the deceased person fall into group 2, i.e. they only receive the pillar 3a payout if the deceased person does not leave a spouse or registered partner.
However, as we have already mentioned, the 3a assets are added to the estate when calculating the compulsory portions. If the 3a payment violates the children’s compulsory portion, they can file an action for a reduction. This may be the case if the deceased person leaves few assets in the estate.
Here is an example with an existing will or inheritance contract: Hans Müller is married to Erika and has two children, Lisa and Tom. Hans has a pillar 3a account with CHF 100,000 and savings of CHF 30,000. When Hans dies, the following happens:
- The CHF 100,000 from pillar 3a goes directly to Erika. Lisa and Tom can’t change that.
- The total value for the calculation of the compulsory portion is CHF 130,000. In this case, the compulsory portion for the children is CHF 32,500 or CHF 16,250 per child. However, as this compulsory portion is higher than the additional savings, they can claim the remaining amount with an action for reduction if necessary.
Pillar 3a in the event of death for singles without children
Are you single and have no children? Then either your parents, siblings or other heirs designated by you will inherit the 3a assets. You are free to determine the order of the heirs.
Imagine the following: You are single, have no relatives (any more) and have not defined any other heirs in your will. In this case, the pillar 3a assets can theoretically lapse.
To prevent this from happening, single people can designate other heirs in their will. This can also be a charitable organisation or institution.
Pillar 3a in the event of death: What should I do as a surviving dependant?
As the surviving dependant, you must inform the 3a provider of the death. In the case of finpension, you will need the following documents:
- Official identification of the beneficiaries or their legal guardians
- Certificate of inheritance
- Identification of the registered marital status of the deceased
- Certificate of executor
- Divorce judgements for divorced marriages / dissolved partnerships
- In the case of inheritance notices, the inheritance notice protocol
Depending on the case, we may require further documents. Please contact us by e-mail – we will be happy to send you the form for the payment.
Taxes on pillar 3a in the event of death
In the event of death, the pillar 3a is paid out to the beneficiaries. The 3a payout is taxed separately from the remaining income. The reduced capital withdrawal tax is applied in the same way as for a regular withdrawal. The degree of relationship does not play a role here. You can find more information on tax in the linked article.
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