Pillar 3a offers you an ideal combination: you save taxes today and at the same time build up a financial cushion for your retirement. Payments can be deducted from taxable income annually, reducing your tax burden. Over the years, the compound interest effect helps to steadily increase your assets until retirement. In this way, you can close possible gaps from the 1st and 2nd pillars and better maintain your standard of living in old age.

This pension solution is ideal for people who are subject to AHV contributions, want to save taxes and build up assets in the long term.

The money saved in pillar 3a is primarily used for your retirement provision. A regular payment is possible at the earliest five years before the ordinary reference age. 

Exceptions:

• Purchase or construction of owner-occupied residential property
• Taking up self-employment
• Definitive departure from Switzerland
• Repaying a mortgage
• Receipt of a full disability pension

You must apply for an early payment and prove your exceptional case.

Good to know: You can also have several pillar 3a pension solutions and make the withdrawals in stages. In this way, the tax burden is lower because you do not have to pay tax on all your assets at once. In general, it is advisable to check what the tax consequences are and what impact it will have on the overall pension provision before making a payout.

An insurance solution protects you and your family from risks. They are bound to a fixed term. In the event of disability, the insurance company will pay the premium for you. If you want to access the assets from pillar 3b at any time, then a pure investment solution may be more suitable. Zurich also offers these - via its subsidiary Zurich Invest AG.

You  can design our Zurich CapitalFund unit-linked life insurance according to your needs:

• Flexible deposit: You decide whether to make regular deposits or make a one-time payment (one-time deposit).
• Security: In the event of disability, Zurich continues to save for you. You can also protect your salary and, in the event of death, your family.
• Return: You can choose from 10 investment plans with equity components ranging from 0 to 100%.

More information about life insurance or the differences 3a: bank or insurance.

With a pension foundation, you can choose between an account or custody account solution. 

With a fixed-interest account solution, your balance remains in a savings account and you receive interest on it. With a unit-linked account solution, your assets are invested in investment funds . This gives you the chance of higher returns, but also a certain amount of risk. With a custody account or account solution, you decide for yourself at any time and without specifications, up to the maximum amount, how much you want to deposit.

With savings insurance , you take out insurance. The contract is usually valid until retirement and you are obliged to pay the agreed amounts throughout the term. In return, you will receive various benefits and collateral. With our Premium savings insurance , these are the following advantages, for example:

• Security and returns: 95% of your savings premiums are guaranteed. At the same time, you have attractive return opportunities.
• Protect your family: You and your loved ones are protected against the financial consequences of disability or death. Because with savings insurance, we continue to pay into your pillar 3a even if you become unable to work. Accordingly, you continue to save for retirement, even if you can no longer work.
• You remain flexible: You decide how much you want to save on a regular basis. And if something comes up in life, you can interrupt your premium payments for one to three years.

You do not pay income tax on income in pillar 3a (interest and surpluses) during the term. Read more about the differences between pillar 3a and 3b in our article.

The Swiss retirement provision system is based on three pillars:

• state retirement provision (1st pillar)
• occupational retirement provision (2nd pillar) 
• private retirement provision (3rd pillar)

The aim of the Swiss retirement provision system is to provide the country's population with a reliable income for all life situations. For example, after retirement, in the event of the death of a partner or in the event of permanent disability due to illness or accident. 

1st pillar – state retirement provision

The 1st pillar is about ensuring subsistence. This pension is intended to cover the minimum necessary living requirements. The 1st pillar consists of old-age and survivors' insurance (OASI), disability insurance (DI) and the income compensation scheme (EO).

Find out more at vita.ch

2nd pillar – occupational retirement provision

The 2nd pillar ensures your accustomed standard of living. For occupational retirement provision, employees and employers pay at least the same amount into a pension fund. The employer can also volunteer to pay more.

Find out more at vita.ch

3rd pillar – private retirement provision

The assets in the 3rd pillar serve to close any pension gaps from the 1st and 2nd pillars. It also allows you to retire earlier or fulfill dreams and wishes after retirement.

Find out more at our article about the third pillar.

The biggest differences between a pillar 3a solution from a bank or an insurance company relate to the risk protection for you and your family, your savings goal and the period of insurance.

Risk protection for families and savings goal
With an insurance company, you take out an insurance contract under pillar 3a. This includes insurance coverage in the event of disability and/or death. This means that if you become disabled, your insurance will pay the annual amount due into pillar 3a for you. You will therefore continue to save for retirement, even if you can no longer work. Depending on the retirement provision solution you choose, you will also be paid a disability pension until retirement. In any case, you will meet your defined savings target. In the event of death, a lump-sum death benefit will be paid to your surviving dependents. This means that your loved ones will at least be protected from the financial consequences of this misfortune. You pay for this insurance coverage with a portion of your premium.

When you open your pillar 3a with a bank, the main focus is on the savings process. You and/or your family will not be protected against the financial consequences of disability or death. If you can no longer pursue your work, you will no longer be permitted to pay into pillar 3a. In this case, you will not reach your defined savings goal. 

Period of insurance
Insurance contracts under pillar 3a always have a fixed period of insurance. This usually extends until the normal retirement age. You undertake to pay a certain amount into the pillar 3a policy on a regular basis. 

After the third insurance year, however, you have the option of pausing payments for up to three years. Insurance coverage does not expire in this case. This means that you will continue to be fully insured if, for example, you go on parental leave or spend time abroad. The only consequence is that your savings target will be reduced by the amount of the paused payments.

Yes, provided you are affiliated with a pension fund. Otherwise, you can pay a maximum of 20 percent of your net salary into pillar 3a.