Close the gap and save taxes What you need to know about making additional payments into pillar 3a

The Federal Council is now allowing subsequent payments into pillar 3a for years in which the maximum permitted contribution was not invested. But what are the specific requirements and what are the benefits?

The Federal Council has now made it possible to pay into pillar 3a at a later date. This allows you to build up more retirement assets and pay less tax. But the new regulation also raises some questions. blue News has the answers.

Subsequent payments can be made for the first time in 2025, i.e. the following year at the earliest.

You can pay in a maximum of ten years later, i.e. in 2035 for the last time for the year 2025.

You can even make additional payments for a year in which you did not yet have a 3a account. So if you don't open a 3a account until 2027, you can make subsequent payments for the years 2026 and 2025 and build up even more retirement assets.

The prerequisite is that you had or have income subject to AHV contributions both in the year for which you make the supplementary payment and in the year in which you make the supplementary payment. This varies from canton to canton, but is usually in the four-digit range.

Another condition is that you have paid the full amount into pillar 3a in the current year. So if you want to make additional payments in 2026 for the year 2025, you must have already transferred the full contribution to your 3a account for 2026.

Simply put: because it is advantageous to pay the maximum possible contribution into pillar 3a every year. However, this is not always possible, either because your income fluctuates or because you had particularly high expenses in one year. At a later date, you may have enough money again to pay into pillar 3a not only for the current year, but also for previous years.

You can now fill contribution gaps, save more money in pillar 3a, achieve higher interest income and save tax. You can also deduct the amounts paid in retrospectively from your income in your tax return.

Point 4 is dedicated to the arguments in favor of pillar 3a savings.

Pillar 3a allows you to save retirement capital - in addition to your pension fund, if you pay into one. You can withdraw this money five years before retirement age at the earliest. The financial institution that manages your 3a account usually pays you interest on the amount.

The second advantage is that you save on taxes. Firstly, because the money in your 3a account does not count as assets and therefore does not have to be taxed. In addition, you can deduct the amount you pay in from your income in your tax return. This means you pay less tax on both your assets and your income.

Please note that the money you withdraw from your 3a account counts as income. In the year in which you have your 3a account paid out, you must therefore pay tax on this amount as income. More on this under point 7: How much tax do I pay when I withdraw the money from pillar 3a?

Each year, the federal government defines a maximum amount that can be paid into pillar 3a and deducted from taxes. In 2024, this will be CHF 7056 for employees with a pension fund, in 2025 it will be CHF 7258.

This contribution is also known as the "small contribution". The "large contribution" applies to self-employed persons and employees without a pension fund, who can pay a maximum amount of around CHF 32,000 into pillar 3a.

From 2026, you can use the small contribution valid in the relevant year to fill earlier contribution gaps. You can also use it to pay in retrospectively for several years.

How much tax you save depends on many factors, which also determine the amount of your tax bill in general.

Banks and other financial service providers offer online calculators that you can use to calculate your tax savings. The calculators from Zürcher Kantonalbank and UBS were used for this article.

An example: An employee with a pension fund, single, without children, with an annual income of CHF 100,000 saves around CHF 1,000 in taxes in a low-tax municipality such as Zug. In Neuchâtel it would be around 2300 francs. If you have only paid in half of the maximum amount, your tax savings will also shrink by about half.

You have to pay tax on the withdrawal of 3a capital as income. How much this will cost you depends largely on the tax rate in your municipality of residence. Roughly speaking, you can expect 3 percent in a low-tax municipality and 5 percent in a municipality with a high rate. If you have CHF 100,000 in your 3a account, you will have to pay CHF 3,000 to 5,000 to the federal government upon withdrawal.

Please note: You can only close a 3a account completely. Partial withdrawals are not possible. This is why financial institutions and advisors recommend opening several 3a accounts. This allows you to close one account at a time and spread the tax burden over several years. It also prevents you from falling into a higher tax bracket because of the 3a withdrawal.