In Pillar 3 there is a differentiation between binding provisions (Pillar 3a) and the free provisions. However, both have the same purpose - namely to safeguard the usual standard of living after retirement or related disability. All those employed can principally contribute to Pillar 3 voluntarily.
These contributions up to a certain amount provide for some tax relief. A differentiation is made by the maximum contributions - namely whether or not the person contributing already has a pension fund or not. The former can make a make a maximum contribution of CHF 6,768.00*, the subsequent, 20% of their annual earned income up to a maximum of CHF 33,840.00* in order to benefit from tax advantages. The receipt of funds from Pillar 3 must be taxed.
In the practice, Pillar 3a is the classical form of provision for the self-employed. Please note, however, that this common form of precautionary saving does not protect against the risks of death or disability. Here, it is advisable, for example, to additionally take out a life insurance policy.
The contributions made, can only be withdrawn early in certain cases. To cite the most important ones, early withdrawal can be claimed if:
- one becomes self-employed,
- residential property is purchased,
- a definitive departure from Switzerland occurs
- or upon reaching the age of 60 years.
* As of 2018