Who is entitled to pay into the 3rd pillar?

Sum­ma­ry:

  • Employ­ment inco­me sub­ject to AHV.
  • Spou­ses and regi­stered part­ners may both pay the maxi­mum pos­si­ble amount if both are employ­ed.
  • It is not enough just to make AHV con­tri­bu­ti­ons for peop­le who are not gain­ful­ly employ­ed.
  • Nor is it enough sim­ply to have other inco­me, such as rent, inte­rest or divi­dends.
  • You can pay in from the age of 18 and a maxi­mum of five years beyond the nor­mal reti­re­ment age (on pro­of that you are still employ­ed).

Spe­cial Cases:

  • Unem­ploy­ed per­sons may pay in. ALV dai­ly allo­wan­ces are regar­ded as repla­ce­ment inco­me.
  • A disa­bi­li­ty pen­si­on is not a repla­ce­ment inco­me. IV reti­rees may only pay in if they have an inco­me from employ­ment that is sub­ject to AHV con­tri­bu­ti­ons in addi­ti­on to the par­ti­al IV pen­si­on.
  • Even after ear­ly reti­re­ment, it is still pos­si­ble to pay into the 3rd pil­lar. Con­di­ti­on: AHV-liable inco­me (from a side­li­ne job).
  • True cross-bor­der com­mu­ters to Ger­ma­ny are not allo­wed to pay into the pil­lar 3a.
  • Cross-bor­der com­mu­ters to Ger­ma­ny who are wee­kly resi­dents in Switz­er­land or cross-bor­der com­mu­ters to Austria may pay into the pil­lar 3a. Howe­ver, they must claim the tax deduc­tion from the can­to­nal tax office them­sel­ves. They must sub­mit an app­li­ca­ti­on for a tariff adjust­ment by the end of March of the fol­lo­wing year. The tax dif­fe­rence will then be refun­ded.
  • For­eig­ners without a C resi­dence per­mit may pay into pil­lar 3a if with­hol­ding taxes are deduc­ted from their wages. Howe­ver, they must claim the tax deduc­tion them­sel­ves (dead­line: 31 March of the sub­se­quent year).
  • Tho­se who recei­ve their wages in the sim­pli­fied pay­roll pro­ce­du­re are not allo­wed to pay into pil­lar 3a. No deduc­tion can be made in the tax return.

Maxi­mum Amount:

  • The same rule regar­ding the maxi­mum amount app­lies to all per­sons who are allo­wed to depo­sit. A distinc­tion is made bet­ween tho­se who pay pen­si­on fund con­tri­bu­ti­ons and tho­se who do not pay pen­si­on fund con­tri­bu­ti­ons.

Condition: AHV-liable income from employment

If you want to pay into the pil­lar 3a, you must have inco­me from employ­ment. This means that you have to work for a living, whe­ther as a self-employ­ed per­son or as an employee. If AHV con­tri­bu­ti­ons are also deduc­ted from this ear­ned inco­me, the con­di­ti­on is met and you can pay into pil­lar 3a and deduct the pay­ment from your tax­able inco­me.

If you are not working, i in other words if you are not employ­ed, you can­not make any pay­ments into pil­lar 3a. It is not suf­fi­ci­ent if you sim­ply make AHV con­tri­bu­ti­ons to avoid mis­sing con­tri­bu­ti­on years in AHV (con­tri­bu­ti­ons for tho­se who are not employ­ed).

It is also not enough if you only have inco­me from rents, divi­dends or inte­rest. You must have inco­me from employ­ment for which AHV is paid. When it comes to the que­sti­on of whe­ther you are allo­wed to make con­tri­bu­ti­ons, the amount of inco­me from employ­ment that is sub­ject to AHV is basi­cal­ly irrele­vant. The amount only plays a role when it comes to the que­sti­on of how much you are allo­wed to pay in.

Earliest possible start and latest possible end of the 3rd pillar

You can pay into the pil­lar 3a for the first time if you are liable to pay tax yours­elf. In Switz­er­land, you beco­me liable to pay tax at the age of 18. From the year in which you turn 18, you can pay into the 3rd pil­lar, pro­vi­ded that you earn an inco­me sub­ject to AHV con­tri­bu­ti­ons.

If you can pro­ve that you have been working beyond the ordi­na­ry reti­re­ment age, you can con­ti­nue to use pil­lar 3a for a maxi­mum of five years. During this time, you can con­ti­nue to make pay­ments.

Special Cases

Unemployment

If you are unem­ploy­ed and recei­ve dai­ly ALV bene­fits, you can con­ti­nue to pay into pil­lar 3a. Unem­ploy­ment bene­fits are regar­ded as a repla­ce­ment for the requi­red employ­ment inco­me.

If your dai­ly allo­wan­ce exce­eds CHF 81.90 per day, you are man­da­to­ri­ly insu­red for the risks of death and disa­bi­li­ty through the BVG Con­tin­gen­cy Fund (2nd pil­lar). In this case, you may pay the maxi­mum amount of the small pil­lar 3a. Howe­ver, the actu­al pay­ment may not exce­ed your inco­me from employ­ment (inclu­ding dai­ly allo­wan­ces) in the year con­cer­ned.

If you have been taxed and have not (no lon­ger) recei­ved unem­ploy­ment bene­fits in the year con­cer­ned, you may no lon­ger pay into pil­lar 3a. Howe­ver, this also means that you can still pay in the year, in that you were noti­fied to no lon­ger recei­ve unem­ploy­ment bene­fits.

Receiving an invalidity pension

Unli­ke the ALV dai­ly allo­wan­ce, the inva­li­di­ty pen­si­on is not regar­ded as repla­ce­ment inco­me. You can the­re­fo­re only pay into pil­lar 3a if you have an inco­me sub­ject to AHV con­tri­bu­ti­ons in addi­ti­on to your IV pen­si­on. The maxi­mum amount you can pay in depends on whe­ther you are affi­lia­ted to a pen­si­on fund or not.

Early retirement

If you have an inco­me sub­ject to AHV con­tri­bu­ti­ons despi­te ear­ly reti­re­ment, you can con­ti­nue to pay into pil­lar 3a. The maxi­mum amount you may pay in depends on whe­ther you con­ti­nue to pay pen­si­on fund con­tri­bu­ti­ons or not.

Cross-border commuters Germany / Switzerland

A distinc­tion must be made bet­ween cross-bor­der workers who nor­mal­ly return to their place of resi­dence in Ger­ma­ny every day (for a maxi­mum of 60 working days per year without retur­ning to their main place of resi­dence) and cross-bor­der workers who return to Ger­ma­ny only at wee­kends (more than 60 working days per year without retur­ning to their main place of resi­dence).

The first cate­go­ry are con­si­de­red to be true cross-bor­der com­mu­ters. They are only sub­ject to sub­or­di­na­te tax lia­bi­li­ty in Switz­er­land. Alt­hough a tax (maxi­mum 4.5 %) is also deduc­ted from their inco­me, this tax is credi­ted against the tax pay­a­ble in Ger­ma­ny. The main tax lia­bi­li­ty for wages ear­ned in Switz­er­land is in Ger­ma­ny. For this rea­son, genui­ne cross-bor­der com­mu­ters can­not make any pay­ments into the 3rd pil­lar of Switz­er­land. A Ger­man cross-bor­der com­mu­ter direct insuran­ce is an alter­na­ti­ve.

The second cate­go­ry is con­si­de­red to be wee­kly resi­dents in Switz­er­land. Their inco­me is ful­ly tax­able in Switz­er­land. Howe­ver, sin­ce their main resi­dence is still in Ger­ma­ny and the­re­fo­re the Swiss sta­te has no access to wee­kly resi­dents, taxa­ti­on at source app­lies. This means that befo­re the sala­ry is paid out, the employ­er must deduct the Swiss with­hol­ding tax from the sala­ry and hand it over to the can­ton. Ger­man wee­kly resi­dents in Switz­er­land can pay into the 3rd pil­lar, but they must claim the tax deduc­tion themselves.They must requ­est a rate adjust­ment from the can­to­nal tax office by the end of March of the fol­lo­wing year at the latest.

Cross-border commuters Austria / Switzerland

The dou­ble taxa­ti­on agree­ment bet­ween Switz­er­land and Austria does not reco­gni­se cross-bor­der com­mu­ter sta­tus. Accord­in­gly, the sala­ry ear­ned in Switz­er­land is ful­ly tax­able in Switz­er­land. With­hol­ding tax is also app­lied here, which is why pay­ments into the 3rd pil­lar are pos­si­ble. Howe­ver, as is alrea­dy the case for Ger­man wee­kly resi­dents in Switz­er­land, the tax deduc­tion must be clai­med by the resi­dent hims­elf. If this is done by 31 March of the fol­lo­wing year at the latest, the with­hol­ding tax will be cor­rec­ted sub­se­quent­ly. The tax savings are refun­ded.

Foreigners without a residence permit C

For­eign workers who are employ­ed in Switz­er­land and do not (yet) have a C resi­dence per­mit can pay into the 3rd pil­lar if with­hol­ding tax is deduc­ted from their wages. Howe­ver, they must app­ly for the tax deduc­tion them­sel­ves to the can­to­nal tax office by 31 March of the fol­lo­wing year. The app­li­ca­ti­on must be accom­pa­nied by the pen­si­on foundation’s cer­ti­fi­ca­te of pay­ment. The dif­fe­rence bet­ween this and the with­hol­ding tax paid will then be refun­ded.

Wage in simplified payroll procedure

Is your wage cal­cu­la­ted in a sim­pli­fied pay­roll pro­ce­du­re? If so, you will unfor­tu­n­a­te­ly not be able to make any con­tri­bu­ti­ons to pil­lar 3a.

Explana­ti­on: In the sim­pli­fied accoun­ting pro­ce­du­re, all social bene­fits and inco­me tax (flat-rate tax of 5 %) are deduc­ted from wages befo­re pay­ment. The inco­me that is deduc­ted in this way must still be listed in the tax return, but it is no lon­ger inclu­ded in tax­able inco­me (pure­ly decla­ra­ti­ve cha­rac­ter for other cal­cu­la­ti­ons such as pre­mi­um reduc­tions). Sin­ce the inco­me ear­ned in the sim­pli­fied pay­roll pro­ce­du­re is not added to the tax­able inco­me, no deduc­tion for pil­lar 3a con­tri­bu­ti­ons can be clai­med in the tax return.

Nor is a retroac­ti­ve tariff cor­rec­tion gran­ted, as is the case with cross-bor­der com­mu­ters to Ger­ma­ny with a wee­kly stay in Switz­er­land, cross-bor­der com­mu­ters to Austria or for­eig­ners without a C resi­dence per­mit.

writ­ten on 08.05.2020


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