Inhaltsseite:3rd pillar explained

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3rd pillar explained

Privately fund your retirement with the 3rd pillar, so that you can have today's lifestyle later in life.

3rd pillar - private provision

Voluntary private provision forms the 3rd pillar of the Swiss 3-pillar concept. Your goal is to supplement the benefits from the 1st and 2nd pillars to close any potential pension shortfalls, or to cover individual needs. Together with the AHV and the occupational pension (BVG), 3rd pillar funds are suitable for continuing one's normal standard of living after retirement. The 3rd pillar is subdivided into restricted (pillar 3a) and unrestricted pension plans (pillar 3b). 

Restricted pension plan: pillar 3a

Pillar 3a is used for a voluntary personal pension. It allows employed persons to build up their own retirement capital or to ensure later amortisation of a mortgage, for instance.

Save on taxes

  • Annual contributions can be deducted from taxable income up to a legally permitted maximum amount of 100%.
  • The 3a pension funds paid in, as well as income from them, are not subject to wealth tax or income tax and are also exempt from withholding tax.
  • Payments from the 3rd pillar are taxed at a reduced rate and separately from other income.
  • Pillar 3a may benefit from significant tax advantages, but is limited in the way it can be structured. For this reason, it is called a "restricted pension".

Increase your potential returns

  • If you have a Sparen 3 savings account for your pillar 3a, you not only build up assets, but also benefit from a preferential interest rate.
  • Your potential returns increase if you invest your Sparen 3 savings account balance in our securities (equities, bonds, etc.).
  • Securities savings make a higher earnings potential possible compared to an account solution due to the investment's long-term nature. 

Reasons for early payment

  • Purchase of owner-occupied residential property
  • Amortisation of a mortgage on owner-occupied residential property
  • Buying into a pension fund
  • Taking up self-employment
  • Commencement of a significantly different type of employment by a person who is already self employed.
  • Permanent move abroad
  • Claiming a full disability pension

Unrestricted pension plan: pillar 3b

When building up an unrestricted pension plan there is unlimited freedom, but there are fewer or no tax privileges. Pillar 3b combines all the assets that are not already fixed in pillars 1, 2 and 3a. Pillar 3b includes traditional voluntary saving and investing for various goals, such as for education, retirement, a holiday, a new car, etc. Unlike pillar 3a, pillar 3b assets are freely available at any time. 


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