Maximum amounts pillar 3a
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Pillar 3a – Maximum Amounts for 2019

Old Age and Survivors' Insurance (AHV) and employee benefits insurance (BVG) only cover 60 to 70 percent of the previous household income after retirement. Those who do not want to give up their accustomed standard of living in their old age should therefore contribute to Pillar 3a every year. 

The first pillar (state pension/Old Age and Survivors' Insurance) and the second pillar (employee benefits insurance) of the Swiss pension system are intended to maintain the standard of living after retirement. Together, they only cover between 60 and 70 percent of the previous household income. The third pillar makes it possible to plug individual pension gaps. Anyone who wishes to use this option can thus pay the annual maximum amount into Pillar 3a and will benefit from several advantages at the same time.

The maximum amounts are defined annually by the Federal Social Insurance Office. For 2019, they are as follows:

  • For employed persons with a pension fund: CHF 6,826
  • For employed persons without a pension fund: 20% of net earned income, maximum CHF 34,128.

With the higher maximum amount, self-employed persons without a pension fund will have the opportunity to compensate for the resulting pension gap on their own.

Anyone who pays into a 3a account earlier will save more

The amount you want to pay into your pillar 3a account must be credited to the pension account on or before December 31, 2019. To avoid losing the tax benefits, it is advisable to make the deposits at an early stage – it is best to do so before the holiday period. It is even better to transfer the maximum amount at the beginning of the year. This is because the interest earned on the 3a account is significantly greater than a private or savings account.

Saving tax with pillar 3a

These two examples provide an impressive demonstration of how much tax married couples and single people alike can save by paying into Pillar-3a. 

Example 1

Single person, Protestant, taxable income: CHF 60,000, tax rates for 2018, maximum contribution for 2019, City of Zurich

  Without pillar 3a With pillar 3a
Part payment
With pillar 3a
Maximum amount
Annual payment   CHF 3,000 CHF 6,826
Total taxes CHF 7,220 CHF 6,579 CHF 5,825
Annual tax saving*   CHF 641 CHF 1,395

* Upon disbursement, your retirement capital is taxed separately and at a lower rate than your other income.

Example 2

Married couple, Protestant, taxable income: CHF 120,000, tax rates for 2018, maximum contribution for 2019, City of Zurich

  Without pillar 3a With pillar 3a
Part payment
With pillar 3a
Maximum amount
Annual payment   CHF 3,000 CHF 6,826
Total taxes CHF 18,088 CHF 17,326 CHF 16,355
Annual tax saving*   CHF 762 CHF 1,733

* Upon disbursement, your retirement capital is taxed separately and at a lower rate than your other income

The tax benefits of Pillar 3a

  • The annual savings deposits can be deducted from taxable income up to the statutory maximum amount.
  • No wealth, income or withholding tax throughout the entire term of the savings plan.
  • On payout, the money saved will be taxed at a reduced rate, separately from other income.
  • The assets in the 3a account can be used for purchasing owner-occupied residential property. The withdrawal is subject to tax – although at a reduced rate and separately from other income.