What exactly is the 3rd pillar? 

A quick reminder about the three-pillar system in Switzerland 

In Switzerland, preparing for retirement is based on three pillars. It sounds complicated, but it’s really not. 

The 1st pillar is the AHV, the Old Age and Survivors’ Insurance. It’s compulsory for everyone and aims to cover your basic living needs once you retire. 

The 2nd pillar is your pension fund or BVG. You and your employer both pay into it. It complements the AHV so you can maintain your standard of living. 

And finally, there’s the 3rd pillar, which is completely optional but incredibly smart. 

Why opening a 3rd pillar is a great idea 

The 3rd pillar is your personal savings pot for the future. It is really smart because it lets you: 

• Save money regularly or occasionally, depending on your budget 
• Reduce your taxes efficiently, and yes, perfectly legally 
• Prepare for retirement independently 
• Finance important projects like buying a home, starting your own business or taking a sabbatical year 

But most importantly, unlike the first two pillars, you’re the one in control. You decide how often you contribute, how much you save and how you want to invest your money. 

The tax benefit of the pillar 3A 

The pillar 3A is the most common form of the 3rd pillar because it offers strong tax advantages. Every franc you pay into your pillar 3A is deducted directly from your taxable income until you reach the annual limits allowed In simple terms, that means you pay fewer taxes every year. 

Annual limits for 2025: 

• CHF 7,258 if you contribute to a 2nd pillar through your employer. 
• CHF 36,288 if you are self-employed without a 2nd pillar. 

A quick example. You earn CHF 80,000 a year and pay CHF 7,000 into your pillar 3A. Your taxable income drops to CHF 73,000. The result? You save hundreds or even thousands of francs every year.  

Sounds good, right? 

Savings that fit your life 

What makes the 3rd pillar especially appealing is its flexibility. You can:

• Start small and increase your payments over time 
• Take a break if needed, with no penalties 
• Open several 3A accounts to spread out your withdrawals at retirement and optimise your taxes 

And the best part. Your money always belongs to you, even if you change jobs, move abroad or start a new project. It follows you wherever life takes you. 

Investing your 3rd pillar 

If you want to, you can also invest the money in your pillar 3A to make it grow faster. Depending on your profile and goals, you can choose more dynamic options like investment funds or safer ones like standard savings accounts. This way your retirement savings can grow more quickly while still benefiting from tax advantages. 

One last tip before you start 

The most important thing is to start early. Even small amounts make a big difference over time. So don’t wait too long to get started. Time is your most valuable ally when it comes to building your future with peace of mind. 

At Pilla, we’re here to support you simply, clearly and without the complicated stuff. Because planning your future should always be easy. 

Ready to set your future on the right track?