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To know everything you need to know about the Third Pillar

Expat in Switzerland: Build your future pension

COVID-19 Updates - We make the third pillar online

How is your family covered? Less than you think.

Is it better to have an insurance third pillar or a banking third pillar?

The Third Pillar and Taxes

Is it worth having more than one third pillar?

Our advice on the third pillar

The Third Pillar, is it really convenient?

The Third Pillar for property owners

What is the best third pillar?

What is the third pillar and who should subscribe to it?

The Three-Pillar System in Switzerland

INFORMAZIONI GENERALI

INFORMATIONS GÉNÉRALES

GENERAL INFORMATION

Third Pillar 2021, maximum amounts, taxes, social insurances.

Third Pillar 2020, maximum amounts, taxes and social insurance.

Third Pillar 2022, maximum amounts, taxes and social insurance. 

Third Pillar 2019, maximum amounts, taxes and social insurance.

Third Pillar 2023, maximum amounts, taxes and social insurance

IMPORTI MASSIMI

MONTANTS MAXIMAUX

MAXIMUM AMMOUNTS

What benefits have cross-border commuters in making a third pillar in Switzerland?

Third Pillar for cross-border commuters

FRONTALIERI

FRONTALIERS

CROSS-BORDER WORKERS

Review of the third pillar Swiss Life Dynamic Elements 3a and 3b

Review on the 3rd pillar Generali Scala Capital

Review on the third pillar Baloise Safe Plan 100

Review on the third pillar for cross-border workers Liechtenstein Life kokon value plus 3a or 3b

Review on the 3rd pillar Zurich Premium Life

RECENSIONI PRODOTTI

AVIS SUR LES PRODUITS

PRODUCTS REVIEWS

The third pillar is one of the components of the Swiss social security system, along with the first and second pillars. The first pillar represents state provision, is compulsory for everyone living in Switzerland, and is made up of AHV (Old Age and Survivors' Insurance), IV (Invalidity Insurance) and IPG (Compensation for Loss of Earnings) and is intended to guarantee a minimum subsistence level. The second pillar represents occupational pension provision and consists of the BVG, occupational and non-occupational accident insurance, daily sickness benefits insurance and vested benefits institutions. In the collective ideal, it should be able to keep the beneficiary's standard of living unchanged from when he or she was working. But the reality is quite different since, between the first and second pillar, those with full contributions would reach retirement with about 60% of their last income. That is why the third pillar is worthwhile and highly recommended.

Third pillar, its role in the Swiss pension system

The 3rd pillar is not compulsory and it is up to the individual to choose whether to take it out with a bank or an insurance company. It is a security buffer for the future and also for the present. Indeed, in the event of misfortune, i.e. death or disability, those with a third pillar could have an income for themselves and their family. So, it is convenient to subscribe to a third pillar? Absolutely yes. With the 3rd pillar, gaps in the mandatory social security system can be filled. More and more people are deciding to subscribe to a third pillar in anticipation of old age (knowing, however, that they can benefit from it in the event of life transitions such as buying a house, moving abroad or starting self-employment).

The third pillar represents private pension provision

The third pillar is divided into tied pension plan 3a and free pension plan 3b. There are many options, which can be adapted to each individual's needs. Having the third pillar also allows you to save on tax. While the first and second pillars are an obligation, the third pillar is a choice that should be implemented. If you opt for the restricted 3rd pillar pension, you should be aware that the money will be tied up and only in certain cases, such as those mentioned above, can it be withdrawn in advance. If, when taking out a 3rd pillar, you include cover such as a death lump sum or disability pension, your family or the 3rd pillar owner will have financial cover in case of misfortune. Thus, stipulating a third pillar is very important for both employees and the self-employed. The various forms allow capital to be set aside according to availability and there are also upper limits imposed by law. For example, in 2021, an employee who chooses to have a tied pension can pay in a maximum of CHF 6,833 per year. For the self-employed, on the other hand, the maximum is 20 per cent of income, but not more than CHF 34,128 per year. For the unrestricted pension plan there is no maximum.

Tied and free pension provision, the different types of third pillar

A tied third pillar can be taken out with an insurance company or a bank. Which is more convenient? The fundamental difference lies in the 'waiver of premium in the event of disability' cover. If one chooses an insurance company, in the unfortunate event of a disability, even a partial one, the company itself will pay the premiums in the place of the insured, until the time of his or her retirement. The same is not the case with the bank, so when you retire you will only receive what you paid in.

Banking third pillar or insurance third pillar? The difference comes in the event of disability

The insurance third pillar is, in fact, life insurance with capital accumulation, with a financial instrument such as investment funds, indices, certificates, etc. inside it. The way it works is very simple, by paying a monthly premium throughout your working life, you will accumulate a capital that will be paid out to you at retirement age in one lump sum. Each product has its own characteristics. There are products with or without a final guarantee, which focus more on yield, and others that focus more on security. But the choice of one product over another must be made, above all, according to the specificities and uniqueness of each person. It must be said that there is no product that is better or worse than the others, but there are products that respond to a greater or lesser extent to the needs of individual customers. Because the third pillar has to be tailor-made and after a careful analysis of existing covers. In this way, every possible scenario can be foreseen and, if necessary, cover for death and/or disability can be included to protect you and your family.

Insurance third pillar, how does it work?

The third pillar is also tax-efficient. It is in fact deductible from income tax. The deduction of the amount paid into the third pillar affects your taxable income, lowering the rate you use to calculate your taxes. So, having a third pillar also means paying less tax! And when you redeem the capital you will pay income tax at a reduced rate. If you opt for a free pension instead, there are no limits and you can pay into your third pillar as much as you want. Anyone living in Switzerland can take it out. You can redeem the accumulated sum (even partially) whenever you want, so in addition to saving for your retirement, the free third pillar can be designed for well-defined medium-term projects (educating your children, buying a house, for example). The amount paid in is not tax deductible, except under certain conditions, but when you withdraw the sum you will be taxed on your assets and not on your income.

Third Pillar and taxes: what is the relationship?

What if a person dies or becomes disabled? Be careful, because the compulsory social security system does not offer much cover. If you do not have a 3rd pillar, your spouse will not receive a widow's pension unless you fulfil certain requirements, such as having at least one child in common, or being at least 45 years old and married for five years. If, on the other hand, the deceased person has taken out a third pillar and included a death benefit in it, it will be paid to the heirs, thus avoiding many problems. Think, for example, what would happen if, following a death, the spouse could no longer afford to continue paying the mortgage on their house, or the children could no longer afford to continue their university studies? This is why planning for the third pillar in good time becomes crucial. What happens instead in the case of disability? Again, if a disability pension was provided for when the contract was signed, it will be received until the end of the contract (i.e. until retirement). In short, thinking about protecting your loved ones and yourself is strongly recommended when you choose to take out a third pillar, because you are covering situations that you rarely think about but which, if they occur, risk putting everyone in serious financial difficulty. The third pillar is convenient for everyone: including people who are not gainfully employed and perhaps take care of the house and children, but who may find themselves in a state of disability and therefore need money to support themselves and find someone to help them, the very young who do not work and do not enjoy second pillar cover and would therefore receive a minimum pension from the IV in the event of disability.

Protect your family with the third pillar

Certainly, for a worker living abroad and working in Switzerland it is almost even more important, because he/she is unlikely to pay all the contributions to the mandatory pension system. In order to guarantee himself a good standard of living, he has to make up for it with a third pillar. What about tax deductions, in this case source tax? For a cross-border commuter it is only possible to deduct the third-pillar share if he receives 90% of his income in Switzerland, where income means all family income. The biggest advantage for a cross-border commuter, however, is that he has money available after retirement and does not have to drastically lower his lifestyle.

Is it also worthwhile for cross-border commuters to subscribe to a 3rd pillar?

Qu'est-ce que le troisième pilier et à qui sert-il?

Cos’è il terzo pilastro e a chi conviene stipularlo?

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Persons affiliated to a pension fund (generally employees): can make maximum contributions for the year 2023 of CHF 7'056 /year. Those who are not affiliated to a pension fund (generally self-employed): they can make contributions of 20% of their income, but up to a maximum of CHF 35'280/year.

2023 - How much can you contribute to the Pillar 3a?

For tax deduction purposes, the amounts paid into pillar 3a from 01.01.2023 to 31.12.2023 are taken into account. Then, between January and February 2024, you will receive the certificate from the company with which you have concluded the third pillar to attach to your tax declaration. If you have more than one third pillar, you will of course receive a certificate for each contract, but in any case the total may not exceed the maximum deductible for the year 2023. Thus, the sum of the premiums paid to the third pillar 3A will be deducted from your taxable income. If, on the other hand, you are taxed at source, e.g. B permits or cross-border commuters, you will have to apply for Ordinary Additional Taxation (TOU) at the withholding tax office by 31 March of the following year in order to be able to take advantage of the tax deduction.

Deducting the 3rd pillar from taxes

Maximum AHV/IV pension: CHF 2'450 /monthMinimum AHV/IV pension: CHF 1'225/monthBVG entry threshold: CHF 22'050BVG coordination sum: CHF 25'725THIRD PILLAR With second pillar, maximum deductible: CHF 7'056, &nbsp;Without second pillar (max. 20% of net salary): Max. CHF 35'280

Social insurance figures 2023

Terzo pilastro 2023, importi massimi, imposte e assicurazioni sociali

Troisième pilier 2023, montants maximaux, impôts et assurances sociales

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Third Pillar 2023, maximum amounts, taxes and social insurance.

Third Pillar 2022, maximum amounts, taxes and social insurance.

Third Pillar 2021, maximum amounts, taxes and social insurance.

The Swiss pension system is designed to reach retirement, in the best case scenario, with 60% of the last income. But beware, only those with full contributions (44 years of first pillar and 40 years of second pillar) will receive that percentage. So if, like the vast majority of cross-border workers, you started working in Switzerland after the age of 21, you will certainly have a lack of contributions, and therefore the percentage compared to your last income will certainly be lower. That's where the third pillar comes in to fill those gaps and secure your future. &nbsp;

Why does it make sense?

It is a product linked to investment funds where you will pay in the amount you have chosen each month and thus, throughout your working life, accumulate a capital that will be paid out to you in one lump sum at retirement age. The third pillar used for cross-border commuters allows you to choose and include up to 10 investment funds (from a list of more than 100) and also change them during the year. Therefore, the choice of investment funds is of paramount importance and must be tailor-made for each person. Being a 3rd pillar with an investment fund component, and having multiple funds to choose from, the product is well suited to both prudent savers and those seeking a higher return. But to have a third pillar that fully satisfies you, competent advice is a must when setting up the strategy. The 3rd pillar for cross-border commuters, as a supplementary pension, is private and voluntary, and therefore needs to be set up taking into account the benefits of the 1st and 2nd pillars, adjusting it as life circumstances change. For example, the premium can be increased or decreased according to the evolution of your income. &nbsp;

How does the third pillar work for cross-border commuters?

The third pillar is not only a retirement savings, but also a security cushion for the future as well as the present.&nbsp; In the event of disability, in fact, it activates a cover called 'premium waiver', which makes the company take over your premiums until retirement age, ensuring that you arrive at your goal with peace of mind whatever the circumstances.&nbsp; In addition, those with a 3rd pillar may choose to include a disability pension to compensate for lost income, or a death lump sum to protect your family. For example, death cover is important for those who have a mortgage to pay, or who want to guarantee their children the money they need to finance their studies, even in the worst case scenario. But to do this, it is clear that you first need to know your current first and second pillar benefits. &nbsp;

Protect your income and your loved ones

1) Is the third pillar flexible? Yes, for example you can adjust premiums and investment funds at any time. 2) If the funds go bad, could there be losses? Yes, and that is why you have to rely on competent advisors like ours. 3) Is it worthwhile to make a third pillar with a duration of more than 65 years of age? NO (except in very specific cases), so be wary if you are offered a third pillar for a longer duration. 4) Can I keep it even if I no longer work in Switzerland? Of course you can, you can continue your plan, perhaps adjusting your premium to your new situation.&nbsp; 5) Are there any penalties if I withdraw or cancel it early? Yes, there are penalties during the first 5 years in case of withdrawal/cancellation. 6) Is it true that you can deduct withholding tax? Yes, if you choose a Pillar 3a, but under certain conditions. Consult us for more information. &nbsp;

Quick questions and answers

Here are a few points to look out for if you are about to conclude a third pillar:&nbsp; 1) Is the intermediary you are dealing with registered with the FINMA intermediary register?&nbsp; 2) Can the intermediary explain to you in detail the composition and functioning of the investment funds?&nbsp; 3) Did you choose the investment funds together?&nbsp; 4) Was it explained to you that in addition to gains, there may also be losses?&nbsp; 5) Was the offer made taking into account your current Pillar I and Pillar II cover?&nbsp; 6) Did the intermediary give you the full offer and enough time to evaluate it?&nbsp; &nbsp;

How to recognise good advice?

1) We are neutral and impartial, and in us you will find frank and honest advice. 2) Our advice is highly specialised, and you can also get it via video call. 3) We use state-of-the-art analysis software. 4) At Thirdpillar.ch every customer is unique, and we only offer tailor-made solutions to ensure your satisfaction. 5) We give our customers as much time as they need, so no stress. &nbsp;

Why choose Thirdpillar.ch for your third pillar?

Il terzo pilastro per frontalieri

Troisième pilier pour les frontaliers

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Insurance linked to investment funds and traditional savings. Available as pillar 3a or pillar 3b.
Minimum premium: CHF 150/month.

Type of third pillar:

The Swiss Life Dynamic Elements product is, in our opinion, a very attractive product for those seeking a higher return for a relatively low risk (depending on how the product is set up). Yes, because the product has many aspects that can be customised based on your profile and your needs, for example:
You can choose from four investment strategies: income, balanced, growth and equity.
You can include elements to reduce investment risk, such as outperformance protection and maturity management (consult us to better understand these mechanisms).
In addition, a guaranteed death lump sum and disability cover can be included.
How does it work?
The functioning of this product revolves around two fundamental components: the security element and the performance element.
The security element is, in practice, a classic insurance component, remunerated with an interest rate that is set at 2% for 2021. This interest rate is set by Swiss Life, and can also be negative, up to -2%.
The return element, on the other hand, consists of a portfolio of investment funds and is therefore not remunerated with an interest rate, but with any performance of the funds themselves.
Depending on the investment strategy chosen, and the type of premium spread (which can be 'dynamic' or 'constant'), a part of the premium you pay each month will go on the security element and the rest on the return element. For example, if you choose the 'balanced' strategy, this distribution will be 50%-50% between the two elements.
At the end of the contract, Swiss Life will pay you the balance of the security and yield elements that you have accumulated over the years.
Attention: the final capital is not guaranteed, so it may be higher or lower than what you have paid in over the years.
Given all the variables and possibilities offered by this product, in order to have a third pillar that fully satisfies you, thorough and competent advice is essential.

Brief Description:

Here are a few points to pay attention to:
1) Is the person in front of you registered with the FINMA intermediary register?
2) Is the intermediary able to explain to you in detail the composition and functioning of the product?
3) Have you chosen the investment strategy together?
4) Has it been explained to you that in addition to gains, there may also be losses?
5) Was the offer made taking into account your current first and second pillar cover?
6) Did the intermediary give you the full offer and time to evaluate it?
If you need advice, please contact us by clicking here

But how to recognise good advice?

- The product offers many possibilities, allowing it to be customised to your measure.
- Although the product does not have a guaranteed capital, it offers several mechanisms to reduce the investment risk.
- Possibility of including insurance cover in the event of disability and death.

Positive aspects of Swiss Life Dynamic Elements:

- The product, by its very nature, does not have a guaranteed capital.

Negative aspects:

In our opinion, the third pillar Swiss Life Dynamic Elements UNO and DUO is a good product for those who are looking for a higher return opportunity and are willing to take a little extra risk.
It is also suitable, for example, for those who already have a 3rd pillar (perhaps with guaranteed benefits) and want to diversify.
Finally, it must be said that, as with all investment products, your satisfaction will depend, above all, on the quality of the advice.

Conclusion:

Revue du troisième pilier Swiss Life Dynamic Elements 3a et 3b

Recensione sul terzo pilastro Swiss Life Dynamic Elements 3a e 3b

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Per sapere tutto quello che devi sapere sul Terzo Pilastro

Expat in Svizzera? Attenzione alla previdenza

E’ meglio un terzo pilastro assicurativo o uno bancario?

Risparmio fiscale 2023: ricordati per tempo del terzo pilastro

Aggiornamenti COVID-19 - Il terzo pilastro lo facciamo online

Conviene avere più di un terzo pilastro?

Le nostre consulenze sul terzo pilastro

Il sistema dei tre pilastri in Svizzera

Il Terzo Pilastro, conviene veramente?

Qual è il miglior terzo pilastro?

Il Terzo Pilastro e le imposte

Come è coperta la tua famiglia? Meno di quanto pensi.

Il Terzo Pilastro per i proprietari d'immobili

Pensionamento in Svizzera: L'importanza dell'analisi previdenziale e del terzo pilastro

Capire il certificato del secondo pilastro LPP

Pianificazione del pensionamento: Rendita o capitale LPP?

Terzo pilastro 2023, importi massimi, imposte e assicurazioni sociali.

Terzo pilastro 2022, importi massimi, imposte e assicurazioni sociali.

Terzo pilastro 2021, importi massimi, imposte e assicurazioni sociali.

Terzo pilastro 2020, importi massimi, imposte e assicurazioni sociali.

Terzo pilastro 2019, importi massimi, imposte e assicurazioni sociali.

Quali benefici hanno i frontalieri nel fare un terzo pilastro in Svizzera?

Recensione sul terzo pilastro Zurigo Previdenza Premium

Recensione sul terzo pilastro per frontalieri Liechtenstein Life kokon value plus 3a o 3b

Recensione sul terzo pilastro Baloise Safe Plan 100

Recensione sul terzo pilastro Generali Scala Capital

Recensione sul terzo pilastro Vaudoise RythmoInvest

Articles

Tout ce que vous devez savoir à propos du 3ème pilier

Est-il préférable d'avoir un 3ème pilier d'assurance ou un 3ème pilier bancaire ?

COVID-19 Updates - On fait le 3ème pilier online

Comment votre famille est-elle couverte ? Moins que vous ne le pensez.

Est-il utile d'avoir plus d'un troisième pilier ?

Le troisième pilier et les impôts

Le 3ème pilier pour les propriétaires d'immeubles

Le 3ème pilier, ça vaut vraiment le coup ?

Le système des trois piliers en Suisse

Nos conseils en matière de 3ème pilier

Quel est le meilleur 3ème pilier ?

Troisième pilier 2023, montants maximaux, impôts et assurances sociales.

Troisième pilier 2022, montants maximaux, impôts et assurances sociales.

Troisième pilier 2021, montants maximaux, impôts et assurances sociales.

Troisième pilier 2020, montants maximaux, impôts et assurances sociales.

Troisième pilier 2019, montants maximaux, impôts et assurances sociales.

Quels sont les avantages pour les frontaliers de faire un 3ème pilier en Suisse ?

Avis sur le 3ème pilier Zurich Prévoyance Premium

Avis sur le troisième pilier Baloise Safe Plan 100

Avis sur le troisième pilier Generali Scala Capital

Avis sur le troisième pilier pour les frontaliers Liechtenstein Life kokon value plus 3a ou 3b