What is Pillar 3b?
Pillar 3b, known as "unrestricted pension provision", is the part of the optional of the private pension plans in Switzerland and supplements the pensions guaranteed by the 1st and 2nd pillars.
Unlike the pillar 3a, it does not impose no limits annual instalments, and allows total capital availability at any time, unconditional related to age or use (self-employed, property purchase, personal project, etc.).
Pillar 3a or pillar 3b?
Here are the main ones 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
- 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
What products are available in 3b?
The flexibility of the 3rd pillar B translates into great freedom in choosing the savings vehicle — life insurance, bank account, investment funds, or real estate — as well as in the duration and amount of contributions. The 3b pillar also allows you to freely designate beneficiaries in the event of death, making it an ideal instrument to supplement retirement income while maintaining an accessible financial reserve for other goals.
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.
In the case of a single premium (insurance), it will also be tax-exempt if it meets the conditions of the pension character. That is to say:
- 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
The cantons define the amount of deductible annual contributions. In some cantons, a Pillar 3b is not deductible at all, whereas in the canton of Geneva it will be in 2025, you can 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
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.
3rd pillar B: 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’ll find single-premium life annuities, which allow you to pay a lump sum once in exchange for a guaranteed lifetime income — ideal if you want to secure a stable retirement supplement without worrying about market fluctuations. Conversely, periodic-premium contracts offer the flexibility to spread your payments over several years while gradually building up your capital.
For those seeking more dynamic growth, solutions linked to the financial markets (investment funds, dedicated securities accounts, or unit-linked contracts) allow you to invest your savings in stocks, bonds, or ETFs, offering higher return potential — but also exposing your capital to market fluctuations. Finally, multi-support life insurance products combine a protection component (guaranteed capital) with an investment component (variable-yield funds), providing a balance between security and performance. The choice ultimately depends on your time horizon, risk tolerance, and liquidity needs.
We recommend
Subscribing to a 3b pillar requires careful consideration, as it is a flexible solution whose characteristics vary greatly depending on the provider. Before any subscription, it is essential to analyze your financial profile, your objectives, and your risk tolerance in order 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, up to CHF 2,232 for a single person and CHF 3,348 for a married couple.
If the contract allows, you can withdraw your funds at any time without restriction or penalty.
The Pillar 3a is capped, tax-deductible in Switzerland, and withdrawals are subject to strict conditions.
The Pillar 3b has no ceiling or automatic tax advantage; withdrawals and contributions are completely free. In addition, there is a wider range of investment options.
