Questions & answers

In principle, everyone who earns income from gainful employment in Switzerland that is subject to OASI contributions can take advantage of pillar 3a. Deposits can be made starting in the year in which you reach the age of 18 until the regular retirement age (64 years for women and 65 years for men as of 2023). It is also open to anyone who receives daily allowances from unemployment insurance. Pillar 3a is voluntary and is associated with tax benefits. This is because any amounts paid into pillar 3a can be deducted from other taxable income up to the maximum amount according to law (maximum deposit limit).

Factsheet for thresholds for employee benefits

In the event of bankruptcy, up to CHF 100,000.00 of an account holder’s pillar 3a pension savings benefit from depositor protection. This means that the money falls under class two rather than class three of the bankruptcy assets. Pillar 3a savings invested in securities or investment funds are even better protected: securities qualify as special assets and do not form part of the bank’s estate in bankruptcy.

The difference lies in the securities portion. Under an account solution (no risk), 100% of your pension assets are deposited on a fixed-interest account. This means that the securities portion is 0%. A custody account or portfolio on the other hand has an account portion and a securities portion. The securities portion, and in particular the share quota, is limited depending upon the risk class chosen. The maximum portion is 98%.

In principle as many as you wish – for tax reasons we recommend no more than five accounts. The Federal Tax Administration does not limit the number of pillar 3a relationships at banks (bank foundations) or insurance companies. However, the maximum deposit limit applies for all pillar 3a accounts and deposit accounts considered together. This means that if a person has a pension account, a securities pension plan and a pension insurance policy, for example, the maximum total deposit amount is CHF 7,056.00 (in 2024, with affiliation with a pension fund) or CHF 35,280.00 (in 2024, without affiliation with a pension fund).

However, it makes sense to have more than one pillar 3a pension relationship

There are essentially three reasons for this:

• Tax savings in the event of staggered closure of the restricted pillar 3
• Protection of pension assets in the event of bankruptcy of the bank
• Flexibility in the event of early withdrawal of pillar 3a assets

Lump sums of the restricted pillar 3 are taxed progressively. With several pension relationships, the staggered closure will lead to tax savings (depending on the canton).

Pillar 3a assets may be withdrawn before retirement for certain legally regulated needs. In most cases, all the money in a pension relationship must be withdrawn, and the entire amount is taxed.

At Tellco you can design your private pension plan however you like. For example, you can choose among four tried and tested Tellco strategy funds, which you can also personalise further to suit your taste. For example, you can incorporate various exciting thematic funds. If you would like a completely bespoke strategy, you can choose from a variety of cost-effective exchange traded funds (EFTs). Further information and the fund selection list can be found here:

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It’s very straightforward: with just a few clicks in the Tellco ePlix web app you can effortlessly transfer your pension assets to Tellco Pension solutions 3a.

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The maximum pillar 3a amounts that may be deposited annually are a matter of tax deductibility, meaning that deposits into pillar 3a reduce the taxable income so that lower taxes have to be paid as a result.

However, restricted pillar 3a plans can only be joined by persons who have an income from gainful employment or receive compensation for loss of earnings that is subject to OASI/IV contributions.

A distinction is made between the small pillar 3a and the large pillar 3a. The following maximum amounts apply for deposits in 2024:

This is not allowed according to law.

Indeed, the legislator has provided clear clarification for this case: retroactive deposits (subsequent payment) into the restricted pillar 3 are not permitted, neither in full nor in partial amounts of the maximum amount.

Pillar 3a deposits – and thus tax deductions – are always only allowed for the current tax period. This period begins on 1 January and ends on 31 December of the same year.

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Restricted pension assets may be withdrawn no earlier than five years before the regular OASI retirement age is reached (59 years for women and 60 years for men as of 2023).

However, at the latest when the insured person reaches the regular OASI retirement age (64 years for women and 65 years for men as of 2023), that is, at regular retirement, the assets become finally due for payout and the pension provider (bank, insurance company) must pay them out to the insured person.

Exception in the case of deferred retirement

The position is different for anyone who continues to work after reaching retirement age: since 1 January 2008, active employees are allowed to continue making pillar 3a contributions, even after reaching the regular OASI retirement age, for as long as they continue working, for a maximum of five years after reaching the regular retirement age.

This is intended to prevent people from having to withdraw from pillar 3a when they reach the regular OASI retirement age. Anyone remaining in work after reaching the retirement age who continues to pay pillar 3 contributions can also still deduct it from taxable income.

Due to the tax privileges, there are legally limited withdrawal options. The OPO 3 distinguishes between early and regular withdrawal.

If the person making early withdrawal is married or lives in a registered partnership, early withdrawal is only permitted if their spouse or registered partner consents to it in writing. If consent is refused (e.g. in the case of divorce disputes), the person who wants to make early withdrawal may pursue court action to challenge the refusal.

Exceptional cases in which early withdrawal of restricted pension assets is permitted:

• Financing of owner-occupied residential property
• Pledge of owner-occupied residential property (note: not early withdrawal per se)
• Repayment of existing mortgages
• Renovation of owner-occupied residential property
• Buy-in into own pension fund (occupational pension plan)
• Taking up of self-employment as the primary source of income or changing of previous self-employed activity in Switzerland
• Leaving Switzerland (emigration)
• Receipt of a disability pension under the disability insurance scheme and no cover for the risk of disability by additional insurance

Taxes are due on early withdrawals:

According to the law, pillar 3a assets may be paid out within the framework of promotion of home ownership (PHO; for purchase, amortisation, mortgage and renovation) every five years. With spouses and registered partners, the rule applies to each party individually, as they are entitled to their capital independently of each other. The law does not provide for any restriction in the case of other permitted early withdrawals.

From a legal perspective, restricted pension assets may be withdrawn starting five years before the regular OASI retirement age is reached (59 years for women and 60 years for men as of 2023). This means that once this age is reached, pillar 3a capital is no longer restricted and that the money can be withdrawn unconditionally as regular withdrawals.

Under these circumstances, most investment instruments in our securities range can be transferred to your private custody account. This means that your pension assets can be transformed into a custody account, which makes sense in cases involving more sizeable pension assets. Our aim is to give you the freedom to withdraw your savings flexibly at the best time. We can assist you in this and will be pleased to advise you free of charge.

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• In addition to the annual contribution (deposit), capital gains (interest or appreciation in value in the case of securities solutions) are also tax-free.
• A lump-sum payment (early withdrawal or regular payout) is taxed separately from other income at a reduced rate.
• From a tax perspective, it makes sense to enter into several restricted pillar 3a relationships. These can be terminated in stages five years before the regular OASI retirement age is reached.
• Any payout of the pension fund assets should not take place in the same year as the payout of pillar 3a.

If the holder of the restricted pillar 3a dies, the capital is to be paid out by the pension provider (bank) to the beneficiary or beneficiaries in accordance with a legally prescribed arrangement that is known as the order of beneficiaries (according to the Ordinance of 13 November 1985 on Tax Relief on Contributions to Recognised Pension Schemes [OPO 3]). This means that the capital is not part of the deceased’s estate, under the terms of the amended provisions on inheritance law adopted on 1 January 2023 and Article 82(4) of the Federal Act of 25 June 1982 on Occupational Old Age, Survivors’ and Invalidity Pension Provision (OPA).

To ensure that the situation is clear in the event of death, Tellco’s ePlix web app makes it possible to define the order of beneficiaries and thus the order of succession during the lifetime of the person in question.

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