Bound pension planning 3a – Private pension planning with benefits

To be worry-free with enough financial security to retire is the goal of every professional, young or old. With the right retirement plan, it’s possible to maintain your standard of living well into retirement and enjoy the twilight of your life to the fullest. The Swiss three-pillar principle for pensions plans is based on compulsory contributions to the pillars 1 and 2 and well as private financial investment into the 3rd as a 3a pension or free 3b. Private pensions of the 3rd pillar are optional and serve as a supplement to maintain the usual standard of living in old age and to close any precautionary gaps in provisions. The contributions to a pension agreement under pillar 3a also have a tax deduction. Thus, you save not only capital for old age, but can also save on taxes with the pillar 3a tax. You can find all information about the funds you have deposited on our pillar 3a reference page.

Tax Advantages Through the Pillar 3a Retirement Account

Anyone who provides private retirement pensions in 3a pensions can deduct the annual pillar 3a maximum from taxes. The payments made in pillar 3a reduce the taxable income. The maximum amount for employees and self-employed persons who are affiliated with a pension fund is CHF 6883 (as of 2021). AHV-dependent persons without a pension fund can deposit 20% of the net income, but a maximum of 34'416 CHF into the tied pension 3a. In order to claim the tax deductions, the deposit certificate issued by the bank or the insurance company at the beginning of the year must be enclosed along with the tax return. You will find more information on our page about the pillar 3a calculator.

Options for Pensions in Pillar 3a

For the tied pension provision 3a, there are essentially two options between which you can select: the pension agreement with an insurance company or a retirement account in a Swiss bank. Both variants have advantages and disadvantages. In addition, there are many different offers from different providers that must be compared.

• Tied Pension Insurance

In addition to banks, Swiss insurance companies also offer retirement products for restricted pension provision 3a. They differ from banking products in that insurance is always integrated into the offer. In addition to the savings process, the insurance provides comprehensive risk protection, which also covers disability and death. In the first case, an agreed invalidity pension is paid out monthly, in the case of death an agreed death capital is paid to the survivors. However, since the insurance part swaps a portion of the deposits, the saving effect for this insurance solution is lower and premature dissolution can become difficult and costly.

• Bound Pension planning Agreement with a Bank

Pension provision 3a on the bank is a popular form of private retirement provision, especially the classic retirement savings account. As an alternative, there is also the savings in securities, which may promise more yield, but also entails a risk of loss. The advantage of the bank solution is the flexibility in the pillar 3a deposit. Payments can always be adjusted or temporarily suspended. In addition, a bank's pre-financing account can usually be canceled without any problems, or the transferred capital can be transferred to another 3a account with better terms. MoneyPark will find for you the precautionary solution with the best pillar 3a interest rates.