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3rd Pillar (3a/3b): Everything You Need to Know About Private Pension Provision

The 3rd pillar is a private retirement savings scheme that supplements the AVS and LPP. There are two types: 3a (tax-deductible, blocked) and 3b (flexible, no tax benefits).
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What is the 3rd pillar (private pension provision)?

The 3rd pillar in Switzerland is a voluntary retirement savings system (private pension provision) designed to complement the benefits of the AVS (first pillar) and pension funds (second pillar). It comes in two main forms:

2. The 3b pillar offers more flexible savings, although it does not provide the same tax incentives.

2. The pillar 3b offers more flexible savings, although it does not offer the same tax incentives. 

The 3rd pillar in the Swiss pension system

Everything you need to know about the 3rd pillar in Switzerland

Find out everything there is to know about personal pension provision.

Find out more about the 3rd pillar

Pillar 3A vs 3B: Which to choose?

The 3a pillar is a voluntary retirement savings scheme with tax advantages, but the money is largely locked in until retirement. The 3b pillar is a more flexible form of private savings, with no limits and no specific tax advantages, and can be used at any time for various projects.

Pillar 3a (tied pension) Pillar 3b (free)
Main purpose Retirement provision with tax optimization Free savings, flexible and complementary pension plans
Access Employed persons affiliated to the AVS Open to all (employed, self-employed, retired, etc.)
Tax benefits Tax-deductible:
  • Up to CHF 36,288/year if no 2nd pillar
  • CHF 7'258/year if with 2nd pillar
 Not deductible (except in rare cases in cantons such as Geneva and Fribourg)
Payment ceiling Yes: annual ceilings set each year No: free amounts
Withdrawal conditions Limited to certain cases: retirement, home purchase, independence, departure for Switzerland... Free: withdrawal possible at any time
Normal withdrawal age
  • 5 years before AHV retirement age (60 for women)
  • 61 years old men in 2025
 No age restrictions
Taxation on withdrawal Yes: single tax at reduced rate Exempt if for pension purposes
Possible shapes Bank account, funds, mixed life insurance Traditional savings, investments, life insurance, annuities, funds, real estate, etc.
Flexible payments Flexible payments limited by law Complete freedom (amount, frequency, possible interruption)
Passing on in the event of death Beneficiaries defined by law, strict order (spouse, children, etc.) Free beneficiaries (according to contract or personalized beneficiary clause)

The choice between a 3a pillar and a 3b pillar depends прежде всего on your financial goals and personal situation. The 3a pillar is a tied solution, mainly designed for retirement. It offers significant tax advantages, as your contributions are deductible from your taxable income, but in return, the money is locked in until you meet certain conditions (retirement, purchase of a home, starting a self-employed activity, or permanent departure from Switzerland). This makes it ideal if you want to prepare for retirement in a disciplined way while benefiting from substantial tax savings.

Conversely, the 3b pillar is a free savings option that is not subject to the same withdrawal restrictions. You can deposit and withdraw funds whenever you wish, offering greater flexibility to finance other short- or medium-term projects. In addition, it is open to everyone, unlike the 3a pillar, which requires gainful employment. However, it does not provide the same tax advantages as the 3a pillar, except in a few cantons where deductions are available.

The 3a pillar offers a structured solution to supplement income from the AVS and pension funds by allowing you to build up savings under favorable conditions. With a 3a, you can:

Pillar 3A: private pension provision

Benefits of Pillar 3a

  • Tax deductions on taxable income
  • Lower federal, cantonal and municipal taxes
  • Important retirement supplement (1st and 2nd pillars)
  • Attractive returns via investment funds
  • Reduced taxation on withdrawal

Disadvantages

  • Money frozen until retirement (limited exceptions)
  • Annual contribution ceiling
  • Limited flexibility
  • Tax payable on withdrawal of capital

The Pillar 3a offers a structured solution to supplement AHV and pension fund income, enabling you to build up savings on advantageous terms. With a 3A, you can:

  • Withdraw the available funds to acquire a primary residence
  • Pledge your 3A for the purchase of a principal residence
  • Building a comfortable retirement
  • Making 2nd pillar purchases

It is possible to take out a 3a with a bank or an insurance company, with some differences in terms of payment flexibility and risk coverage.

A few figures on tied pension plans

In 2024, over CHF 150 billion was invested in tied pension plans, of which CHF 97 billion in banking and CHF 53 billion in insurance¹.

¹Federal Social Insurance Office. Statistics [online]. Available at: https://www.bsv.admin.ch/bsv/fr/home/assurances-sociales/bv/statistik.html. Accessed: March 10, 2025.

1. Possible forms

The 3rd pillar A exists in two main forms: banking-based and insurance-based.

On the banking side, this may involve a traditional savings account — secure but with limited returns. Others choose investment funds, which offer higher return potential but also carry market-related risks. Between the two, some hybrid solutions provide a balance between security and performance by combining a guaranteed portion with an invested portion.

On the insurance side, the 3a pillar often takes the form of life insurance contracts, investment funds, ETFs, or pure savings plans. These products allow you to save while benefiting from protection in the event of death or disability. Depending on the contract, the capital may be guaranteed or linked to the performance of the underlying investments.

3rd pillar in banking vs. insurance
Criteria 3A insurance 3A bank
Payment frequency Determined in advance Flexible
Type of investment
  • Classic (simple savings)
  • Mixed (savings/risk)
  • up to 100% funds
  • Classic (simple savings)
  • up to 100% funds
Surplus earnings Profit sharing No profit sharing
Possible coverage
  • Death cases
  • Disability cases
 No
Bankruptcy guarantee Amount guaranteed to 100% Guaranteed amount up to CHF 100,000
Waiver of premiums in the event of disability Possible No
Investment horizon Long-term only Medium to short term
Share of guaranteed capital Possible No
Pledging Possible Possible
Key benefits
  • Insurance coverage
  • Profit sharing
  • Amount guarantee
  • More safety
  • Higher surrender value
  • Best financial performance after expenses
  • Flexible payments

2. What are the conditions for opening a 3A?

You can take out a 3rd pillar A in the following cases:

  • You are gainfully employed and receive a income subject to AHV (self-employed or employed)
  • You work in Switzerland while living abroad (e.g. cross-border commuters)
  • You receive a daily allowance from theSwiss unemployment insurance
  • You receive a daily allowance from thedisability insurance subject to AHV
  • You become partially disabled with income subject to AHV
  • You've reached retirement age but keep working (up to 5 years after age 65)
  • You have temporarily stopped working (civilian service, illness, unemployment, etc.)

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3. Pillar 3a tax benefits

Tax incentives are one of the main attractions of Pillar 3a. Here are just some of the tax benefits associated with this scheme:

Deduction of contributions

The maximum amounts you contribute to a 3a pillar are fully deductible from your taxable income up to CHF 7’258 / year (2026 limit), while a person not affiliated with a pension fund (e.g. self-employed individuals) may contribute up to 20% of their income, capped at CHF 36’288.

This translates into an immediate reduction of your taxable base, lowering your tax bill each year. However, only cross-border commuters with quasi-resident status can deduct contributions to the 3a pillar. If they do not have this status, this product will not be advantageous for them, and they would be better off turning to other solutions.

Advantageous taxation on withdrawal

When a withdrawal is made, whether at retirement or for the purchase of a primary residence, the amount withdrawn is subject to the capital benefits tax. It is therefore taxed separately from income, at a reduced rate (1/5 of the regular tax).

Exemption from wealth tax

During the term of your 3a pillar contract, the surrender value is not subject to wealth tax, which represents a real advantage compared to a 3b pillar.

Buybacks in 3a

Starting in 2026, for the 2025 tax year, it will be possible to buy back unpaid contributions. This new feature provides an interesting tool for tax optimization and retirement planning for people working in Switzerland.

4. What are the other advantages of Pillar 3a?

A 3rd pillar A also allows you to withdraw or pledge part of your savings to finance the purchase of your primary residence, making it easier to access home ownership. Additionally, by regularly contributing to this account, you build up an essential supplementary income to ensure a comfortable retirement and maintain your standard of living after the end of your professional activity.

Finally, pillar 3a offers the possibility of making buy-ins into the 2nd pillar, which can help fill gaps in your occupational pension plan and thus optimize your overall financial coverage.

Calculate your return potential

Find out how much you can potentially save between now and retirement with a pillar 3a solution.

Past or simulated performance is no guarantee of future performance. This projection is provided for information purposes only.

Why choose Invexa for your 3rd pillar?

  • We offer a wide range of 3a products in banking and insurance.
  • We are one of the few intermediaries who clearly explain the real costs, in plain language, with no hidden catches.
  • We focus on fund performance, the transparency and the relevance for your situation, not about pushing a product.
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Pillar 3b: unrestricted retirement provision

Benefits of Pillar 3a

  • Highly flexible (no payout limit)
  • Capital available at any time
  • Accessible to all (including the self-employed)
  • Wide choice of savings and investment solutions
  • A good complement to Pillar 3a

Disadvantages

  • No general tax deduction on payments (except in Geneva and Fribourg)
  • Subject to wealth and income tax
  • Limited tax benefits compared to pillar 3a
  • Return depends on type of investment

The 3b pillar is a form of voluntary individual savings, offering greater flexibility compared to the 3a pillar. Unlike the latter, contributions to a 3b pillar are not subject to annual limits and do not offer the same tax advantages, as they are generally not deductible from taxable income — except in certain cantons.

This means that, although it does not offer such attractive tax deductions (unless conditions are met), Pillar 3b allows you to save and withdraw your capital whenever you wish. This makes it an ideal complementary solution for diversifying your savings strategy and financing personal projects.

1. Tax benefits

Tax exemption on withdrawal

The withdrawal of your Pillar 3b capital can be entirely exempted from taxes if the contract is a provident plan, i.e. if the following conditions are met:

  • The term must be at least 5 years (classic) or 10 years (fund-linked).
  • The contract must be taken out before age 66.
  • Payment is made after age 60.

That said, voluntary pension contracts are subject to wealth tax throughout their entire duration. In Geneva, for example, a tax allowance applies: you are liable for wealth tax if your assets exceed CHF 87,632 (only the portion above this threshold is taxed).

Deduction of annual payments

The cantons define the amount of deductible annual contributions. In some cantons, a Pillar 3b is not deductible at all, while in the canton of Geneva it is possible to deduct up to:

  • CHF 2,232 for a single person
  • CHF 3,348 for a married couple

In the canton of Fribourg, the following deductions are available:

  • CHF 750 for a single person
  • CHF 1,500 for a married couple

2. Disadvantages of pillar 3B

Although the 3b pillar offers great flexibility by allowing you to deposit and withdraw funds at any time, its major drawback is that, unlike the 3a pillar, contributions are not deductible from taxable income in most cantons, meaning you do not benefit from direct tax savings on your contributions.

In addition, the 3b pillar is subject to wealth tax for the entire duration of the contract.

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Fill in our 3rd pillar quotation request form and one of our pension experts will contact you shortly with a personalized, no-obligation analysis.

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Discover our 3rd pillar reviews

Are you unsure between several providers? We help you choose the most suitable 3a solution.

Which 3rd pillar for which profile?

You always start by maximizing the 3a. Once the ceiling is reached, you can add a 3b (funds, life insurance, etc.). The choice mainly depends on your time horizon and risk tolerance. The longer the horizon, the more you can invest in equities. As you get closer to withdrawal, you reduce risk, especially starting about ten years before the deadline.

A young person can aim for a 3a heavily invested in equities. A family with a mortgage will favor a 3a insurance policy with appropriate death coverage. An independent worker without a pension fund (LPP) should first maximize their 3a, then complement it with a 3b. High-income earners optimize taxes by spreading their savings across several 3a accounts. Very conservative profiles choose guaranteed solutions—but only if they keep the contract until the end.

The 3a/3b insurance products are designed for the long term: fees are charged upfront, which penalizes early withdrawals during the first few years. If the money might be needed in the coming years, it’s better to avoid insurance-based products and reduce exposure to equities.

How do you set up an effective pension strategy?

Setting up an effective individual pension strategy relies on a precise analysis of your financial, professional, and tax situation. Depending on your objectives, the 3a pillar can offer a tax-efficient solution to prepare for retirement, while the 3b pillar provides greater flexibility and investment freedom. In all cases, a personalized assessment is essential to determine the most suitable strategy.

Frequently asked questions

To end a 3a:

  • Termination must be requested in writing (in the case of a transfer)
  • You must be 60 years old for a man and 59 for a woman.
  • You are receiving a full disability pension
  • You make a withdrawal for the purchase of a principal residence and withdraw the entire capital
  • You (the policyholder) disappoint

To end a 3b:

  • Cancellation conditions are set out in the contract.
  • The maximum amount under Pillar 3a in 2026 is CHF 7,258 for people affiliated to a pension fund (LPP).
  • For self-employed individuals without a 2nd pillar, the ceiling is 20% of income, up to CHF 36,288.

The 3rd pillar can be withdrawn in the following cases:

  • 5 years before AHV retirement age
  • Purchase of principal residence
  • Mortgage amortization
  • Departure from Switzerland
  • Independence
  • Disability or death

The pillar 3b can be removed at any time (subject to the supplier's contractual terms and conditions).

There are a wide range of options for the 3rd pillar, either through a bank or an insurance provider. Most products can be subscribed to within both tied pension schemes (pillar 3a) and flexible pension schemes (pillar 3b).

In insurance, a third pillar is often set up in the form of a life insurance policy or income protection insurance, while in banking, a 3a or 3b most often corresponds to a standard savings account or one linked to investment funds.

Comparing 3rd pillar plans will help you choose the solution best suited to your profile and goals.

People working in Switzerland—whether employed or self-employed—who generate an income subject to AHV can open a 3a pillar. The 3a is also available to cross-border workers.

Yes, it is possible to transfer your third pillar, whether from one bank to another or from an insurance company to another 3a pension solution.

In the case of Pillar 3b, the transfer terms and conditions also depend on the contract.

  • Pillar 3a (tied pension) It is always deductible throughout Switzerland, up to the legal annual limit. Simply enter the amount shown on your bank or insurance certificate under "tied pension provision (3a)".

  • Pillar 3b (free) In principle, it is not deductible at federal level. However, some cantons allow a limited deduction for certain life insurance premiums. Rules vary according to canton and family situation.

As early as possible. The younger you start, the more you benefit from compound interest and tax advantages. You pay lower taxes by paying the maximum than by paying nothing. The higher your marginal tax rate, the more attractive the deduction.

  • In the bank: more flexible, no guaranteed return.
  • Insurance: death/disability benefits, guaranteed savings, but less flexible and higher short-term costs

Yes. You can open as many 3a accounts as you wish. It's even strategically smart when you withdraw, as it allows you to spread the tax burden.

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