New maximum amounts for tied self-provision pillar 3a

Every year, the Federal Office for Social Insurances sets the maximum allowable contribution amounts for Pillar 3a. Find out now how much you can still save this year and already plan for the next year.

What is Pillar 3a?

Pillar 3a is part of the Swiss old-age pension system, which is based on a three-pillar principle. While the first pillar serves to secure a basic level of existence in old age, the second pillar of occupational pension should maintain the standard of living. The purpose of the 3rd pillar, on the other hand, is to cover additional capital needs. A distinction is made between tied pension provision (Pillar 3a) and flexible pension provision (Pillar 3b).

What is the difference between Pillar 3a and Pillar 3b?

Although Pillar 3a and Pillar 3b both fundamentally serve old-age provision, the two pillars differ in several respects. Tied pension provision is so-called because it is only available at retirement age. Early withdrawals are only allowed for special purposes such as the acquisition of home ownership. In contrast, Pillar 3b is available at any time for use. Moreover, contributions to Pillar 3a can be fully deducted from taxable income, while Pillar 3b allows only limited tax deductions.

What are the reasons for making contributions to Pillar 3a?

Contributions to Pillar 3a are worthwhile in several ways. Not only do contributions serve for retirement provision, but they can also cover risks such as disability and death, or be used to finance dreams such as owning a home. Moreover, contributions to Pillar 3a are sensible as they help in achieving tax savings.

Who can make contributions to Pillar 3a?

Central conditions for someone to be allowed to make contributions to Pillar 3a include reaching the age of 18 and having an income subject to AHV (Swiss Old Age and Survivors' Insurance) contributions. In addition to employees, self-employed individuals are also eligible to make contributions. Spouses are both allowed to make contributions if they are both employed. Moreover, retirees earning income below the AHV exemption limit are eligible to make contributions for up to five years beyond the normal retirement age. Unemployed individuals may also make contributions as ALV (Unemployment Insurance) daily allowances are considered as substitute income.

What is the maximum allowable contribution amount?

How much someone can max out their Pillar 3a contributions depends on whether the person is an employee or a self-employed individual with or without a pension fund. The permissible maximum amounts are determined annually by the Federal Office for Social Insurances. For the year 2022, the maximum amounts remain unchanged from 2021 at CHF 6'883.00 for persons with a pension fund and CHF 34'416 for persons without a pension fund.

How are contributions to Pillar 3a invested?

Contributions to Pillar 3a can be invested with banks or insurance companies. Besides the traditional option of a retirement savings account, investments in securities funds are also possible. This latter option is particularly attractive in the current negative interest environment, but also involves certain risks. The ideal investment form should be chosen based on the individual needs of the person.

Findea helps you keep track of your company's financial situation at all times.

• Further information
   
• Calculate an offer for fiduciary