Blog, Pensions: 27.10.263rd pillar in Switzerland: the complete guide to pillars 3a and 3b

The 3rd pillar refers to individual, voluntary pension savings. Nobody is required to contribute, unlike the AVS and, for most employees, the LPP. It supplements these two compulsory schemes to maintain a standard of living close to that of working life once retired.

The figures to know:

The 3rd pillar exists in two very different forms:

Remember one simple idea: pillar 3a is locked savings rewarded with tax benefits, pillar 3b is unrestricted savings with no particular advantage.

The Swiss pension system rests on three pillars designed to complement each other. The AVS provides a basic income for the whole population. The LPP, the 2nd pillar, adds occupational savings for employees. Together, these two pillars aim for around 60% of final income for an average salary.

Two situations create a gap that only the 3rd pillar can fill:

• High incomes. The mandatory LPP only covers salary up to CHF 90,720 a year in 2026. Above that, everything depends on what the employer’s pension fund provides. The further income exceeds this level, the smaller the share covered by the first two pillars.
• The self-employed. Without an employer, they are not automatically affiliated to a pension fund. For them, the 3rd pillar often becomes the main pension tool after the AVS.

Interrupted careers add to this: years abroad, part-time work, a parental break. Each reduces the AVS and the LPP, and the 3rd pillar makes it possible to compensate for part of those years.

Pillar 3a is individual pension savings recognised by the Confederation. Contributions are deductible from taxable income, the money is locked until retirement except in cases provided for by law, and the withdrawal is taxed separately, at a reduced rate. Its rules are set by the Ordinance on Tax Deductions for Contributions to Recognised Pension Schemes (BVV 3).

A 3a account is opened with a bank or an insurance company. For a first practical overview, our article All about pillar 3a covers the essentials. This guide goes further and places pillar 3a within the 3rd pillar as a whole.

Who can contribute to pillar 3a

Only people who receive income subject to AVS can pay into pillar 3a: employees, the self-employed, and unemployed people receiving benefits. A person without earned income, for example a spouse who does not work, cannot open a 3a account in their own name.

Contributions are possible up to the AVS reference age (65, with a transition for women born between 1961 and 1963). A person who keeps working beyond that age can contribute for up to five years after it, so until age 70 at the latest, as long as they have income subject to AVS.

Pillar 3a caps in 2026 and 2027

The deductible amount depends on a single question: are you affiliated to a pension fund (2nd pillar) or not? If you are, like most employees, the cap is CHF 7,258 in 2026 and CHF 7,373 from 1 January 2027: this is the “small cap”. If you are not, like most self-employed people, it reaches 20% of earned income, up to CHF 36,288 in 2026: this is the “large cap”.

These amounts are set by the Confederation and published by the Federal Social Insurance Office. They are adjusted at the same time as AVS pensions. On 2 October 2026, the Federal Council set the new amount for people affiliated to a pension fund, valid from 2027.

The cap applies per person. In a couple where both work, each can contribute up to their own cap.

The amount paid in each year

The cap is a maximum, not a required amount. Everyone contributes according to their means, and nothing requires a payment every year. Some people pay in monthly, others pay a single amount at year end once their situation is known.

Time plays a major role. Paying in CHF 7,258 a year from 30 to 65 adds up to more than CHF 250,000 in contributions, before any interest or return. The longer the contribution period, the higher the total accumulated, regardless of any return.

Example. Julien, 28, has just signed his first contract. He cannot yet pay in the full cap, but sets up CHF 200 a month into his 3a. He will increase this amount as his salary rises and can, if needed, later make up for a missed year through the retroactive buy-in.

Opening a 3a: how it works

1. Your personal situation determines the cap: income subject to AVS or not, affiliation to a pension fund or not.
2. There are three forms: 3a account, 3a in securities or insurance policy, described below.
3. Conditions vary from one institution to another: fees, interest, flexibility of payments, possibility of transfer.
4. The account is opened with a bank or an insurer, and payments must be credited before the deadline set in December.
5. An annual certificate is sent by the institution: it is attached to the tax return.

The principle of the deduction

Every franc paid into pillar 3a, up to the cap, is deducted from taxable income, for direct federal tax as well as for cantonal and communal tax. The tax saving therefore depends on your marginal rate, that is, the rate applied to the top slice of your income. This rate varies with income, family situation, canton and municipality.

Throughout the savings period, money invested in pillar 3a is also excluded from taxable wealth, and its interest or returns are not taxed as income. Tax applies only once, on withdrawal.

An order of magnitude, not a calculation

Illustrative example. Léa, an employee in Geneva affiliated to a pension fund, pays CHF 7,258 into her 3a in 2026. If her marginal rate is around 30%, her tax falls by about CHF 2,200 that year. With a marginal rate of 20%, the saving would be about CHF 1,450; with a rate of 40%, about CHF 2,900.

These amounts illustrate the mechanism. They are not an estimate for your situation: your actual saving depends on your taxable income, marital status, other deductions and municipality. Your canton’s tax administration simulators allow a personalised calculation.

The timeline: pay in before 31 December and declare

• The payment must be credited before the end of the year to be deducted that year. Institutions often set their own deadline a few days before 31 December.
• The payment certificate arrives at the start of the following year. It is attached to the tax return.
• The retroactive buy-in, presented below, follows the same timeline: it is deducted in the year it is paid.

Until 2024, a year without a 3a payment was lost for good. Since 1 January 2025, a new BVV 3 rule makes it possible to make up for missed years. The first buy-in became possible in 2026, for the year 2025.

The conditions are precise:

• Only gaps arising from 2025 onwards can be bought in. 2024 and earlier years are not covered.
• The catch-up covers ten years at most.
• You must have had income subject to AVS in the year of the gap and in the year of the buy-in.
• The ordinary contribution for the year must first have been paid up to the cap. The buy-in comes on top of the year’s payment, it does not replace it.
• Each year, the buy-in is limited to the “small cap” (CHF 7,258 in 2026), even for a self-employed person without a pension fund and even if the accumulated gaps are larger.
• The buy-in is deductible in the year it is made.

The Geneva tax administration has published a detailed presentation of these rules (in French), with practical cases.

Example. Thomas, an employee, paid nothing into his 3a in 2025, the year his second child was born. In 2026, he first pays in the CHF 7,258 for the year. He can then buy in all or part of the 2025 gap, up to CHF 7,258, and deduct both amounts from his 2026 income.

This mechanism changes the way pillar 3a is approached: a difficult year is no longer permanently lost, provided it can be made up later, when cash flow allows.

The same pillar 3a can be managed in two ways.

The 3a savings account. The money stays in an account that earns interest. The capital does not fall, but the interest is generally modest. It is the simplest form.

3a in securities. The money is invested in investment funds specially designed for pillar 3a, made up of shares, bonds and sometimes real estate. The expected long-term return is higher, but the value fluctuates and can fall, sometimes sharply, over several years.

A few reference points to understand the differences:

• The investment horizon. The time between payment and withdrawal determines how much time a securities investment has to recover after a fall.
• The equity share. 3a funds show a profile, for example 25%, 50% or more in shares. The higher this share, the larger the fluctuations.
• Fees. They are deducted every year and reduce the net return. Over twenty or thirty years, a few tenths of a percent make a noticeable difference.

This guide describes the characteristics of each form to explain how it works. It is neither investment advice nor a recommendation of any product or institution.

Pillar 3a can also take the form of an insurance policy. Both options follow the same caps and the same tax rules, but they work differently.

Bank 3a (account or securities):

• you freely choose the amount and date of each payment;
• you can skip a year’s payments without consequences;
• you can transfer your savings to another institution;
• it includes no insurance cover.

Insurance 3a:

• it is based on a contract with a premium fixed in advance, to be paid every year;
• it generally combines savings with cover in case of death or disability;
• it may provide for a waiver of premiums in case of disability;
• cancelling the contract before it ends is often costly, as fees are concentrated in the first years.

The difference lies mainly in the commitment: bank 3a leaves complete freedom over payments, insurance 3a combines savings with risk cover, under a long-term contract. Death or disability cover may also exist elsewhere, for example in the employer’s pension fund.

When can you withdraw your 3a

Pillar 3a can be withdrawn at the earliest five years before the AVS reference age, so from age 60 for a person whose reference age is 65. It must be withdrawn at the latest at the reference age, or up to five years later if gainful employment continues.

As a general rule, a 3a account is withdrawn in one go, in full. This is what makes spreading savings over several accounts useful, as explained below.

How the withdrawal is taxed

The capital withdrawn is not added to your ordinary income for the year. It is taxed separately, at a reduced rate.

• For direct federal tax, the tax is calculated at one fifth of the ordinary scale, under article 38 of the Federal Act on Direct Federal Taxation (DBG/LIFD). The federal charge does not exceed about 2.3% of the capital.
• For cantonal and communal tax, each canton applies its own rules. The rate depends on the canton of domicile at the time of withdrawal, the amount and the family situation.

In most cantons, all pension capital withdrawn in the same year (pillar 3a, but also LPP capital) is added together to calculate the rate. As the tax is progressive, a large amount withdrawn in a single year is taxed more heavily than several smaller amounts withdrawn in different years.

In 2025, the Federal Council proposed increasing the taxation of lump-sum withdrawals as part of its budget relief programme. Parliament dropped this measure in the final vote on 20 March 2026: the current rules remain in force.

Several 3a accounts to stagger withdrawals

Nothing prevents you from opening several 3a accounts, with the same institution or with different ones. The annual cap stays the same: it is shared between the accounts.

The benefit appears at retirement. With several accounts, you can close one per year, between 60 and the reference age, rather than withdrawing all the savings at once.

Example. Marc has built up his 3a across four accounts. He plans to close the first at 61, the second at 62, the third at 63 and the last at 64, avoiding the year in which he will withdraw part of his LPP capital. Each withdrawal is taxed separately, at a lower rate than if he had withdrawn everything in the same year. The exact saving depends on the canton and the amounts: it has to be calculated case by case.

A single account cannot be split at the time of withdrawal: spreading savings over several accounts is done over the years of contribution.

Before age 60, pillar 3a remains locked. The law does, however, provide for a few exceptions:

• Buying or building your main residence, or repaying the mortgage that finances it;
• Starting a self-employed activity, provided you are no longer affiliated to a pension fund. In this case, the withdrawal covers all the savings;
• Leaving Switzerland permanently;
• Receiving a full disability insurance pension.

An early withdrawal is taxed in the same way as a withdrawal at retirement, separately and at a reduced rate.

Pillar 3a and buying a home: the basics

Pillar 3a can be used to finance the purchase of your main residence, that is, the home you live in yourself. It cannot be used to buy a second home or a property to let.

In practice, pillar 3a can be used in two ways:

• as equity at the time of purchase, to complete the personal contribution required by the bank;
• to amortise the mortgage, that is, reduce the debt, either in one go or indirectly by paying into pillar 3a and withdrawing it at retirement to repay.

Using your 3a for a home reduces the savings available for retirement. Both projects, home and retirement, then draw on the same savings. The 2nd pillar can also be used for a home, under other rules presented in our LPP guide.

If the holder of a 3a account dies before withdrawal, the savings are paid to beneficiaries in an order set by BVV 3. In summary:

1. the surviving spouse or registered partner;
2. the descendants, as well as certain people the deceased substantially supported, including a life partner with whom they had lived for several years;
3. the parents;
4. the siblings;
5. the other heirs.

Within certain limits, the holder can specify the order or the split within these groups by a written declaration to the institution. This is particularly important for unmarried couples: without taking this step, the life partner risks receiving nothing, or having to prove the shared life at the most difficult moment.

On death, pillar 3a therefore does not exactly follow the rules of ordinary inheritance. A beneficiary clause reflects the situation at the time it was written: a marriage, a birth or a separation can make it unsuitable.

Pillar 3b refers to any savings built up freely, outside pillar 3a, to prepare for the future. It has no cap, no lock-in and no income condition.

It includes in particular:

• savings accounts and investments in securities;
• so-called unrestricted life insurance, outside pillar 3a;
• real estate held as an investment;
• any other form of long-term savings.

Taxation of pillar 3b

Pillar 3b does not benefit from the tax treatment of pillar 3a:

• the money paid in comes from income that has already been taxed;
• the savings form part of taxable wealth, declared every year;
• interest, dividends and rents are taxed as income every year;
• as a general rule, capital gains on private assets are not taxed in Switzerland.

Some 3b life insurance policies follow specific tax rules, in particular for the benefit paid at maturity. These rules depend on the type of contract, its duration and the age at maturity. They are assessed contract by contract.

The Geneva deduction for life insurance and savings

Several cantons provide a deduction for life insurance premiums and interest on savings capital. In Geneva, the law on the taxation of individuals (LIPP) sets this deduction, according to its text, at CHF 2,200 for a single person and CHF 3,300 for a married couple. These amounts are higher for taxpayers who contribute neither to a pension fund nor to pillar 3a, and increased for each dependant. The amounts applicable each year appear in the instructions for the Geneva tax return.

This deduction remains modest compared with that of pillar 3a.

3b life insurance and passing on wealth

A 3b life insurance contract allows you to designate a beneficiary who will receive the benefit on death, for example an unmarried life partner. The shares reserved for heirs under inheritance law nevertheless continue to apply.

Pillars 3a and 3b do not meet the same needs. Pillar 3a offers a deduction on contributions and no tax on wealth and returns throughout the savings period, in exchange for being locked until retirement. Pillar 3b leaves the money available, without a comparable tax advantage.

Three factors concretely distinguish the two forms:

• access: pillar 3a is reserved for people with income subject to AVS, pillar 3b is open to everyone;
• availability: pillar 3a remains locked except in cases provided for by law, pillar 3b can be used at any time, for example for a near-term project;
• the cap: pillar 3a is limited every year, including the retroactive buy-in, while pillar 3b has no limit.

Alongside the 3rd pillar, other pension mechanisms exist, such as a buy-in to the pension fund, whose rules are presented in our guide to the 2nd pillar.

A self-employed person who is not affiliated to a pension fund benefits from the “large cap” for pillar 3a: 20% of their net earned income, up to CHF 36,288 in 2026.

Example. Sofia works as a self-employed graphic designer and earns a net income of CHF 100,000 in 2026. She can pay up to CHF 20,000 into her 3a and deduct it from her taxable income, almost three times the cap of an employee affiliated to a pension fund.

A few points specific to the self-employed:

• The reference income is the income from self-employment, as shown in the accounts and the tax return. It is only known precisely after the year is closed: many self-employed people pay in a cautious amount during the year.
• Voluntary affiliation to a pension fund, or a parallel salaried activity, brings them back to the small cap of CHF 7,258.
• The retroactive buy-in remains limited to the small cap, even for a self-employed person.
• A withdrawal to become self-employed covers the whole 3a.

For a self-employed person, pillar 3a is often the main pension savings, alongside the AVS. The question arises from the first years of activity.

The case of the manager of an SA or Sàrl is different. Legally, they are an employee of their own company. If their salary exceeds the LPP entry threshold, the company must affiliate them to a pension fund, and they then fall under the small 3a cap, like any employee. Their pension provision is therefore built through the salary they pay themselves, the company’s pension fund and their 3a.

Leaving Switzerland permanently is one of the cases of early 3a withdrawal. The capital is then taxed at source, separately. A person who does not wish to withdraw their 3a can also leave it in Switzerland until the ordinary withdrawal age. Pillar 3b is not subject to any lock-in rules.

The 3rd pillar is not a one-off decision. It runs through the whole of working life: annual payments, missed years and retroactive buy-ins, the form of the savings, the beneficiary clause, the timing of withdrawal. Each of these points follows precise rules, and understanding them early makes it possible to approach each step with full knowledge, alongside the AVS and the LPP.

At Synergix, two separate services can support Swiss SME owners on these topics. Accounting and payroll outsourcing covers companies’ day-to-day operations. Alongside this, for any individual tax question (retroactive 3a buy-in, staggering withdrawals between pillar 3a and LPP capital, the self-employed deduction under the large cap), a specialist from our tax team answers on request. Contact us to discuss it.