Pillar 3a vs. Pillar 3b comparison

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When people talk about the 3rd pillar, 99% of times they are talking about pillar 3a.

For some, the pillar 3a is not convenient, because the paid-in capital serves as a retirement fund and can be withdrawn a maximum of 5 years before retirement. Hence the tax advantage.

For those people, there is the pillar 3b, which is much more flexible. However, most people do not even know that the pillar 3b exists at all and how it can be used to one’s advantage.

Here is a short comparison:

Pillar 3a

  • Can only be taken out by people living in Switzerland. And must be liquidated fully or converted into a 3b when moving out of Switzerland.
  • Contributions are limited to a maximum annual amount (2023: Max CHF 7’056)
  • The amount paid in can be deducted from net income.
  • The paid-in capital does not count as assets during the duration and is also not subject to wealth tax.
  • Pillar 3a capital can be withdrawn up to five years before retirement. Early withdrawal is also possible if you buy your own home, become self-employed or move abroad.
  • If the 3a holder passes away, the law specifies who inherits the capital. Spouse and children come first and second.

Pillar 3b

  • Can be subscribed to by anyone, regardless of place of residence.
  • No limit.
  • No tax advantages.
  • The paid-in capital counts as assets during the duration and is subject to wealth tax, if the minimum amount of the respective canton of residence is reached.
  • You can withdraw the capital in Pillar 3b at any time.
  • In the case of pillar 3b, heirs are free to choose their own heirs, subject to the statutory compulsory portions.

Both forms are voluntary and serve to provide for retirement. However, pillar 3b can be used to invest in equity funds in order to build up capital.

Especially for high-income earners, the 3b is worthwhile (after the 3a maximum amount has been reached), since it is not limited to a monthly amount like the 3a.

This capital can then be withdrawn at any time, e.g. to buy a car or take a trip around the world.

The choice of 3b funds is large and offers conservative as well as offensive investors many possibilities to invest their capital profitably.

If you are interested, please contact us, we will be glad to help you.

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