Frequently asked questions

Whom is a 3rd Pillar A account for?

• Anyone taxed in Switzerland whose income derives from gainful employment, whether a salaried employee or self-employed, and who has to pay OASI/DI social security insurance.
• Any person wishing to improve the financing of their retirement.
• Taxpayers who would like to take advantage of the tax relief offered by the Confederation and the cantons.
• Anyone who is already paying into a 3rd Pillar A account or policy and who has not yet reached the statutory limits.
• Vested benefit holders who already have a tied 3rd Pillar A account and who wish to transfer their assets to a different retirement saving account.
• Vested benefit holders looking for several tied retirement saving solutions for reasons relating to tax and flexibility with withdrawals.

What are the tax benefits of a 3rd Pillar A account?

Payments into a tied retirement saving account (3rd Pillar A) may be deducted from taxable income, in accordance with the provisions of Art. 7 OPP3/BVV3. The maximum contributions permitted by law are determined by the Federal Council and rise regularly in line with inflation. All the income is exempt from income tax and is not subject to withholding tax by the Swiss Confederation or by the cantons, until such time as the capital is withdrawn. Furthermore, the retirement capital is not counted for wealth tax
until withdrawn. If assets are withdrawn, or in the event of death, the Confederation and the cantons will tax any lump sum as income (usually separately from other income) at a special rate or at the pension rate. Beneficiaries of a lump-sum settlement are subject to withholding tax if this benefit is paid to them when they are not (or no longer) domiciled or living in Switzerland.

How much can be invested?

Payments into a tied retirement saving account (3rd Pillar A) may be deducted from taxable income, in accordance with the provisions of Art. 7 OPP3/BVV3. The maximum contributions permitted by law are determined by the Federal Council and rise regularly in line with inflation. All the income is exempt from income tax and is not subject to withholding tax by the Swiss Confederation or by the cantons, until such time as the capital is withdrawn. Furthermore, the retirement capital is not counted for wealth tax until withdrawn. If assets are withdrawn, or in the event of death, the Confederation and the cantons will tax any lump sum as income (usually separately from other income) at a special rate or at the pension rate. Beneficiaries of a lump-sum settlement are subject to withholding tax if this benefit is paid to them when they are not (or no longer) domiciled or living in Switzerland.

Maximum deductions for 2023

• Employed or self-employed persons who are members of an occupational pension plan: CHF 7,056.- 
• Employed or self-employed persons who are not members of an occupational pension plan: 20% of income from gainful employment, up to CHF 35,280.-.

How are the payments or
retirement assets invested?

As a holder of vested benefits, you have an
inalienable right to a portion of the assets in the foundation, represented in the form of shares in the respective portfolios. When a member subscribes to shares in a portfolio, the shares are issued on the day following receipt of payment. The subscription price is the net asset value of one share as calculated two business days following the value date of the amount credited to the account. No fees are charged for this operation.

How can you change your allocation?

You are free to switch the allocation of your
retirement assets between the different investment portfolios at any time as your goals, personal circumstances or financial markets dictate. Your
instructions must be sent in writing to the foundation, which will make the change on the day following receipt of these instructions. No fees are charged for this operation.

When is the retirement savings capital paid out?

Your retirement savings capital will be distributed to you when you reach the normal AVS retirement age (Art. 3(1) LPP/BVG). Should you pass away before reaching this age, the capital will be paid out to the designated beneficiary(ies) (Art. 2 OPP3/BVV3). If you can prove that you are still gainfully employed, payment of the benefits may be deferred up to a maximum of five years from the ordinary AVS retirement age. You may, however, request that your retirement capital be paid out five years before reaching the retirement age (Art. 3(1) OPP3/BVV3).

Under what conditions can I withdraw my retirement capital?

As an unit holder, you may request the
foundation to redeem your shares if:

• you become self-employed and are no longer subject to mandatory occupational pension coverage;
• you use your capital to purchase residential property in accordance with the provisions of Swiss law and relevant ordinances regarding the encouragement of home ownership using
  retirement funds;
• use the capital to repurchase benefits from a tax-exempt retirement savings scheme, or for another recognised form of retirement savings;
• you move abroad from Switzerland;
• become entitled to the federal disability pension from the Federal Disability Insurance Fund.

How are assets divested from the Foundation?

If you fulfil the conditions of Articles 10 and 11 of the foundation’s regulations, you may request in writing to have your shares redeemed. The redemption price is the net asset value of one share as calculated two business days following receipt of the redemption request. No fees are charged for this operation.

What are the terms and conditions for acquiring residential property using retirement funds?

The Ordinance on Tax Relief on Contributions to
Recognised Retirement Savings Schemes (OPP3/BVV3) and the Ordinance on the
Encouragement of the Use of Vested Pension Accruals for Home Ownership (OEPL/WEFV) offer you the possibility to use your blocked retirement capital for purchasing residential property at your place of domicile or habitual place of residence. You can also use the retirement capital for repaying a mortgage or financing improvements to your property, such as conversions or extensions.