Pillar 3A: How Can You Make Up for Gaps in Your Pension Coverage Starting in 2026?

This change stems from an amendment to the legislation governing OPP 3. Under certain conditions, it allows you to retroactively make up for pension gaps dating back to 2025 or later.

The result: a larger pension lump sum upon retirement, as well as a tax benefit thanks to the deductibility of the amounts purchased.*

What does this mean for you, in practical terms?

Each year, individuals with a Pillar 3A account can make contributions up to a maximum amount set by law.

When we talk about a pension gap, it’s simply the difference between the maximum amount you were allowed to contribute in a given year (*) and what you actually contributed:

Maximum allowed amount for the year – amount contributed = pension gap

Until now, any unpaid Pillar 3A contribution was permanently lost once the year had ended. The new regulations now allow you to recoup these unpaid amounts under certain conditions.

Retroactive catch-up applies to pension gaps that arise starting in 2025 and may cover the previous 10 years, within the limits set by law.

Example

Harry has been contributing to Pillar 3A since 2019.

He will not be able to use the new mechanism to make up for the amounts he did not pay between 2019 and 2024. However, he will be able to make up for his 2025 shortfall starting in 2026.

If, for example, he had contributed 4,080 CHF in 2025 when the maximum allowed amount was 7,258 CHF, his shortfall would be 3,178 CHF.

He can choose to make a catch-up contribution in 2026 or wait until a later year. Thus, in 2029, for example, he could make up for the shortfalls from 2025, 2026, 2027, and 2028, provided he meets the conditions in effect at the time of the make-up payment.

Please note, however: a pension gap cannot be made up in installments. If Hervé decides to contribute only 2,000 CHF toward the 3,178 CHF pension gap for 2025, the remaining 1,178 CHF cannot be made up at a later date.

Why Close Your Pension Gaps?

This new option offers two main benefits: strengthening your retirement savings and reducing your tax burden.*

Increase Your Retirement Savings

The amounts purchased supplement the savings accumulated in your Pillar 3A account. They therefore help increase your private retirement savings.

A gap that could previously have been permanently lost can now be recovered and help improve the resources available to you in retirement.

Take Advantage of a Tax Deduction

The buyback also offers a tax benefit: the amount paid can be deducted from your taxable income, in accordance with applicable tax rules.*

Example

Jane received a significant pay raise in 2027.

Her income was previously too low to allow her to contribute the amounts she would have liked to her Pillar 3A in 2025 and 2026. Thanks to the new mechanism, she can now consider making catch-up contributions to close those gaps.

In this way, she increases her retirement savings while benefiting from a tax deduction.

What are the requirements for making a buyback?

Retroactive buybacks are not available without restrictions. Several conditions must be met.

Employment and Income	You must have income subject to AVS and must not have turned 70 at the time of the payment.
Full Annual Contribution	You must have reached the maximum contribution limit for the current year.
Eligible Period	Only years starting in 2025 are eligible, with a maximum retroactive period of 10 years.
Lump-sum payment	The contribution shortfall for a given year must be made up in a single transaction (no installment redemptions).
Buyback Limit	The total amount of buybacks in a calendar year may not exceed the authorized annual legal limit.

Example to illustrate the limits

Let’s imagine that in 2040, the maximum legal amount for buybacks is 7,500 CHF (this is a hypothetical amount).

Alan is 50 years old and wants to use the buyback mechanism to make up for several years of pension coverage. He decides to make the following buybacks:

• CHF 4,000 for 2031;
• CHF 1,000 for 2032;
• CHF 2,000 for 2033.

The total therefore comes to exactly 7,500 CHF.

His transaction complies with the various rules:

• the gaps relate to years within the next ten years;
• each year is fully bought back;
• the total amount of buybacks does not exceed the legal limit of 7,500 CHF applicable in 2040;
• Alain has already contributed 7,500 CHF to his Pillar 3A account for the year 2040;
• he receives income subject to AVS;
• he has not yet reached the age of 70.

He therefore meets the necessary conditions to make this catch-up contribution, subject to the rules in effect at that time.

How do you make a Pillar 3A gap buyback?

Step 1: Verify that you have paid the maximum allowed amount for the current calendar year.

Once this condition is met, you can submit a written request to your current pension provider. They will then inform you of the steps to take and the amounts eligible for a buyback.

Conclusion

Having pension gaps is never ideal for your retirement or your taxes. The good news is that this retroactive catch-up contribution is a great opportunity to take advantage of starting this year.

If you were unable to contribute the maximum amount in 2025 and do not plan to do so, you can confidently plan your catch-up contribution for 2026!

^{(*) The maximum contribution amount varies from year to year. In 2025, employees can contribute up to 7,258 CHF, and self-employed individuals can contribute up to 20% of their annual income, up to a maximum of 36,288 CHF. Tax savings depend on each individual’s personal situation. For cross-border workers, the tax benefit associated with holding one or more Pillar 3A accounts applies only to those with quasi-resident status.}