Provided that you continue to be employed, you can continue to pay Pillar 3 contributions for a maximum of five years beyond the normal retirement age. During this period you can continue to make deposits.
Maximal amount unchanged
The definition of the maximum amount does not change. This also applies if you work beyond the regular retirement date:
- If you are affiliated with a pension fund, you can pay in the small maximum amount.
- If you do not (no longer) pay pension fund contributions, you can pay in the large amount (but no more than 20% of net earned income).
Maximum amount also unchanged in the year of retirement
The above-mentioned regulation also applies in the year of retirement. If you are affiliated to a pension fund, you can pay in the maximum amount of Pillar 3 even if you only work a fraction of the year. If you are no longer affiliated to a pension fund, the maximum amount is based on the large 3rd pillar. This is subject to the known restriction that the contribution may not exceed 20% of your actual net earned income in the year of retirement.
|Net earned income|
(after deduction of AHV/IV/EO/ALV)
|maximum deposit with Pension Fund|
|maximum deposit without pension fund|
(CHF 34’128 or 20 %)
|CHF 10’000||CHF 6’826||CHF 2’000|
|CHF 50’000||CHF 6’826||CHF 10’000|
|CHF 100’000||CHF 6’826||CHF 20’000|
|CHF 250’000||CHF 6’826||CHF 34’128|
Does it still make sense to make a deposit in the year of retirement?
This question cannot be answered in general terms: It depends on where you live, how much taxable income you have in the year of retirement and how much retirement assets you will draw in the same year.
- Calculate how much tax you can save by paying in the year of retirement. If your taxable income is low, the purchase is worth less than if your income is high. Please note: Any pension benefits from Pillar 1 and 2 from the time of retirement must also be taken into account as taxable income.
- Calculate how much (more) tax you have to pay for the purchase. Please note that all lump-sum benefits from the pension plan in the same year are added together (usually also those of your partner). This is relevant because the lump-sum withdrawal tax is progressive.
Once you have made the two calculations, you will see whether it is still worth making a deposit in the year of retirement. In many cases, it may be worthwhile to pay in the full amount again in the year of retirement.
Proof of the continuation of employment
To continue your 3a pension relationship, you must provide the pension foundation with proof of your entitlement. If you are employed, you can do so by means of an employment contract or salary statement. If you are self-employed, it is best if you submit a confirmation from the Ausgleichskasse responsible for you.
written on 07.05.2020