Pillar 3A vs 3B: the differences made simple

February 11, 2026 — 3 min read

You often hear about pillars 3A and 3B, but you are not quite sure what the difference is? No worries, that is completely normal. In Switzerland, the pension system is often seen as complex, but you will see that it is actually much simpler than it looks. Today, we break down these two pillars in a clear and straightforward way.

3rd Pillar

Why do we talk about the “3rd pillar”?

First, let’s look at the bigger picture. The Swiss pension system is based on three pillars.

The 1st pillar (AHV) is mandatory and covers your basic needs in retirement
The 2nd pillar (occupational pension or BVG/LPP) complements the AHV and helps you maintain your standard of living
The 3rd pillar is voluntary. It allows you to save individually for retirement while benefiting, depending on the option chosen (3A or 3B), from attractive tax advantages

Pillar 3A vs 3B: the key differences

	Pillar 3A	Pillar 3B
Who is it for?	Anyone earning an income subject to AHV contributions	Everyone, subject to contractual conditions
Purpose	Prepare for retirement, save for a project or financially protect your family	Free and flexible savings, with the option to include death or disability cover
Tax benefits	Yes, this is the big advantage: contributions are deductible from taxable income and the capital is not part of taxable assets	No
Contribution period	From age 18 up to 5 years after the AHV reference age, provided you are working	Free, you decide, subject to contractual conditions
Annual contribution limit	CHF 7,258 if you are affiliated with a pension fund, or 20% of net income up to a maximum of CHF 36,288 if you are not	No limit
Investment options	Savings accounts, investment funds and life insurance	Savings, investment funds, securities, art, real estate, life insurance, etc
Withdrawal	Earliest 5 years before and latest 5 years after the legal retirement age	You can withdraw whenever you want
Early withdrawal	Only possible in the following cases: • Permanent move abroad • Becoming self-employed • Purchase of a primary residence • Repayment of an existing mortgage • Buy-in to a pension fund • Transfer to another 3A foundation	No restrictions, subject to contractual conditions

Focus on pillar 3A: the smart option for your taxes

Pillar 3A (tied pension provision) is particularly attractive if you want to save on taxes. Each year, you can deduct the full amount paid in from your taxable income.

For example, if you earn CHF 80,000 gross per year and pay CHF 7,000 into your 3A, your taxable income automatically drops to CHF 73,000. The result: less tax to pay that year.

The capital accumulated is exempt from wealth tax throughout the savings phase.
Be aware though that when you withdraw the money, you will have to pay a reduced tax, usually between 5 and 10% depending on the canton. This is why it makes sense to open several 3A accounts and stagger your withdrawals at retirement to avoid a high tax bill.

Pillar 3B: freedom first

With pillar 3B, also known as free pension provision, you enjoy much greater flexibility. You can withdraw your money at any time without having to justify it.
The downside is that there are no tax advantages.

When should you choose one or the other?

Choose pillar 3A if your goal is to prepare for retirement while reducing your taxes. This is especially relevant if you have a stable income and want to optimise your savings over the long term
Go for pillar 3B if you want full access to your savings at any time, even if that means giving up tax benefits

The Pilla tip

Ideally, you combine both. This way, you benefit from the tax advantages of pillar 3A for your retirement, while keeping a flexible portion in pillar 3B for unexpected expenses or short-term projects.

Key takeaways

Pillar 3A = smart retirement savings with tax benefits
Pillar 3B = flexible savings without constraints, but without tax benefits

Now that you have the full picture, all that is left is to decide how to best prepare your future. At Pilla, we are here to help you make the most relevant choices, simply and transparently.