Pillar 3b in brief
- Pillar 3b enables tosave freely with no annual ceiling or age restriction for withdrawal.
- Taxation : Pillar 3b assets must be declared on the tax return and are taken into account when calculating thewealth tax.
- The beneficiaries in the event of death can be freely designated
- Pillar 3b can be used for a variety of purposes: retirement savings, project financing, free savings, risk coverage (disability, death), etc.
What is Pillar 3b?
The 3b pillar, called “voluntary pension,” constitutes the optional part of private pension (3rd pillar) in Switzerland and complements the benefits guaranteed by the 1st and 2nd pillars.
Unlike the 3a pillar, it imposes no annual contribution limit and allows full access to the capital at any time, without conditions related to age or purpose (self-employed, real estate purchase, personal project, etc.).
Pillar 3a or pillar 3b?
Here are the main differences between pillar 3a and pillar 3b:
- Pillar 3a (tied pension)
- Pillar 3b (free)
- Main purpose
Free savings
- Access
Open to all
- Tax benefits
- Tax deductible according to maximum amounts
Non-deductible (except life insurance in Geneva and Fribourg)
- Withdrawal conditions
Limited to some cases: retirement, buying a home, independence, moving to Switzerland...
Withdrawal possible at any time
- Normal withdrawal age
- No earlier than 5 years before ordinary age
Anytime
- Taxation
- On withdrawal (lump-sum benefits, reduced rate)
- During the contract (wealth tax)
- Tax-exempt capital payment
- Possible shapes
Bank account, funds, mixed life insurance
- Passing on in the event of death
Beneficiaries defined by law, strict order
Free beneficiaries
Pillar 3b in Geneva
In Geneva, Pillar 3b is a particularly attractive tax lever, yet less well known than its counterpart, Pillar 3a.
Its main difference is that it is not locked in until retirement. You retain flexible access to your capital, making it both a wealth and a tax-efficient instrument.
Premiums paid are deductible from income (52.11 column Income) as follows in 2026:
Single person:
- CHF 2,345 per year for a single person
- CHF 4,690 for a person without Pillar 2 or Pillar 3a
Couple:
- CHF 3,518 for a married couple
- CHF 5,277 if one of the two does not contribute to Pillar 2 or Pillar 3a
- CHF 7,036 if both contribute neither to a 2nd nor to a 3a pillar
Additional deductions for children:
- 959 CHF in addition for parents affiliated to a pension fund
- CHF 1,350 if neither contributes to a 2nd pillar or 3a pillar plan
- CHF 1'800 if both do not contribute to a Pillar 2 or 3a plan
These deductions are an advantage specific to the canton of Geneva, which does not apply in most other Swiss cantons.
To be deductible, the 3b pillar must necessarily take the form of a life insurance contract. This may seem restrictive, but in practice, there are contracts linked to investment funds allowing up to 100% investment in stocks, funds, or ETFs.
This way, you combine insurance protection with long-term return potential. This type of contract is particularly interesting for the long term, especially within the framework of retirement planning.
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Tax benefits of 3rd pillar B
Although contributions to the 3rd pillar B are not as strongly incentivized as in pillar 3a through tax deductions, the 3b pillar nonetheless offers several tax advantages.
Tax-free capital on withdrawal
The payout of capital from the 3rd pillar B (including surpluses and returns) is exempt from lump-sum benefits tax at the time of withdrawal.
According to Art. 20 LIFD, in the case of a single premium (insurance), it will also be tax-exempt if it meets the conditions of pension character. That is:
- Contract duration must be 5 years (10 years if linked to funds)
- Payment is made after age 60
- The contract was concluded before the age of 66
- The policyholder and the insured person are the same person
Taxation of life annuities
Since January 1, 2025, life annuities taken out under the 3b pillar are subject to income tax on 4% of the amount (down from 40% in 2024).
However, participation in surpluses is taxed at a rate of 70% (income tax).
Tax deductions
Cantons define the amounts of deductible annual contributions. In some cantons, a 3b pillar is not deductible at all, whereas in the canton of Geneva in 2026, it is possible to deduct up to CHF 2,345 for a single person.
In the canton of Fribourg, the following deductions are available:
- CHF 750 for a single person
- CHF 1,500 for a married couple
These deductions apply only when subscribing to a 3b pillar in the form of insurance, and not through a bank.
How is Pillar 3b capital taxed?
The capital in the 3b pillar is subject to the wealth tax throughout the entire duration of the contract. Wealth is taxed above a certain threshold and depends on the canton. In Geneva, the wealth tax applies from CHF 87,632, while in the canton of Vaud, it starts at CHF 58,000.
Pillar 3b: for whom?
The 3rd Pillar B can be adapted to the following profiles:
- People who have contributed the legal maximum to Pillar 3a
- Those seeking total flexibility on amounts, supports and withdrawals
- Anyone wishing to save beyond retirement
- Persons with no income subject to AHV
Where can I take out a Pillar 3b?
You can take out a 3b pillar either as insurance or with a financial institution. The decision will depend on your needs (protection of loved ones, retirement planning, returns, etc.).
What solutions exist?
Several models exist depending on your objectives. You will find single-premium life annuities, which allow you to pay a capital sum once and then receive a guaranteed lifelong income—ideal if you want to secure a retirement supplement without worrying about the markets. Conversely, periodic premium contracts offer the flexibility to spread your contributions over several years while gradually building up capital.
For those aiming for more dynamic growth, solutions linked to the financial markets (investment funds, dedicated securities accounts, or unit-linked accounts) allow you to expose your savings to stocks, bonds, or ETFs, offering higher return potential but also a risk of capital fluctuation. Finally, hybrid life insurance products combine a protection component (guaranteed capital) with an investment component (variable-return funds), providing a balance between security and performance. The choice will depend on your time horizon, risk tolerance, and liquidity needs.
Table of possible solutions in 3b
- Bank
- Insurance
- Investment funds
- ETFs, index funds
- Miscellaneous securities account
- Structured products
- Savings accounts
- Bonds
- Etc.
- Life annuities
- Revenue plan
- Single premium investment
- Endowment/ETF-linked endowment insurance
- Life or disability insurance
How does the succession of a 3b pillar work?
Thanks to the pillar 3b beneficiary clause, assets are paid directly to designated beneficiaries, In other words, the capital is immediately transferred to the beneficiaries, whether defined by law or by the clause itself, without passing through the estate. In practical terms, the capital is immediately passed on to the beneficiaries, independently of the ordinary distribution of the estate.
However, this mechanism has an important legal limitation to be aware of: the surrender value of a 3b insurance policy, such as a mixed life insurance, can be included in the calculation of reserved portions. If the reserved heirs (children, spouse, or parents, depending on the situation) believe that their minimum rights have not been respected, they have recourse through a reduction action. In this case, it is not the insurer who is held accountable, but the designated beneficiary, who must compensate the aggrieved heirs up to the surrender value.
The situation is different for pure risk insurance, meaning death coverage without a surrender value. In this case, the benefit paid is generally not subject to reduction: the beneficiary receives the full death benefit, with no possibility of dispute from the heirs.
What happens to my Pillar 3b in the event of divorce?
In the event of a divorce, the 3rd pillar is considered part of the couple's assets. Savings accumulated during the marriage are generally shared, while assets acquired prior to the marriage or received as an inheritance remain personal. The division depends on the marital property regime: participation in acquisitions, community of property, or separation of property. An agreement or divorce settlement can adjust the terms as long as they remain fair.
Let us guide you
Subscribing to a 3b pillar requires careful consideration, as it is a flexible solution whose features vary greatly depending on the provider. Before subscribing, it is essential to compare the options and analyze your financial profile, goals, and risk tolerance to identify the most suitable plan.
The returns, fees, and guarantees can vary significantly from one contract to another and affect the overall performance of your savings in the long term.
Frequently asked questions
The 3b pillar is the free pension plan in Switzerland, part of the 3rd pillar.
Unlike pillar 3a, it has no contribution ceiling, allows withdrawals at any time, and offers a free choice of beneficiaries. You can invest in various products: life insurance, savings accounts, funds, or real estate. Tax deductions are limited, but withdrawals are tax-exempt.
Each spouse can freely subscribe to one or more 3b pillar contracts; there is no regulatory limit per person or per household.
Yes, capital and gains must be reported on your French tax return if they generate taxable income or are included in the IFI calculation, but they are not deductible.
Yes, it is possible tobuy property with a 3b pillar.
If the contract allows, vous pouvez retirer vos fonds à tout moment.
This makes it an ideal tool for early retirement.
Attention cependant, en assurance, si vous terminez le contrat avant la date d’échéance, la valeur de rachat peut être inférieure aux primes versées.
The Pillar 3a is capped, tax-deductible in Switzerland, and withdrawals are subject to strict conditions.
The Pillar 3b has no ceiling and no automatic tax benefit (except in Fribourg and Geneva); contributions and withdrawals are completely flexible. In addition, a wider range of investment options is available.
As a general rule, Pillar 3b is not deductible from direct federal tax.
Unlike Pillar 3a, there is no federal deduction limit.
However, some cantons provide deductions, notably the cantons of Geneva and Fribourg, under certain conditions and within limited amounts.
It is therefore essential to check the tax rules in your canton of residence.
Yes, the Pillar 3b can be more attractive in Geneva than in other cantons, because a specific cantonal tax deduction exists (CHF 2,345 for a single person).
Furthermore, if the pension conditions are met, the withdrawal is tax-exempt (unlike the 3a pillar, which is taxed). This makes it an excellent tool for tax optimization in Geneva.
There is no cantonal deduction for a bank-based Pillar 3b. However, it offers great flexibility, high liquidity, and lower short-term fees.
A Pillar 3b via life insurance includes death or disability coverage and encourages disciplined saving. It is flexible but not suitable for the short term due to fees charged at the beginning of the contract (unlike annual fees with a bank). The insurance-based Pillar 3b is more suited for retirement planning, although partial withdrawals during the contract are possible.
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