Pillar 3a How many accounts would make sense?

One, two or three: It’s often worth opening more than just one Pillar 3a account – for tax reasons.

byStephan Lehmann-Maldonado 06 Feb 2017
Especially those in their autumn years who want to bring in an ample harvest should tackle their pension in good time.

It’s generally known that one Pillar 3a is a good thing. But clever savers and tax optimizers ask themselves: “How many Pillar 3a accounts can and should I open?”

The law leaves it open. But some cantonal tax authorities would like to restrict the number of 3a accounts. They argue that having more than three doesn’t provide extra security, and is merely a way of saving tax. So they see it as a form of tax evasion. Most cantons have a lower limit for the taxation of lump-sum payments, such as those drawn from Pillar 3a.

Too, too many is unhealthy

“So having many accounts doesn’t bring much benefit. However, two to three accounts can make sense as this lets you stagger the withdrawal of your retirement savings and keeps administration costs in check,” says Nils Aggett, Head of UBS Pension Services.

It’s important to know that the earliest age at which a payout can be made from a Pillar 3a account is usually 59 for women and 60 for men. The last account must be closed by age 64/65 unless you remain in gainful employment and continue to pay AHV contributions. In this case, you have to withdraw all your money by age 69/70 at the latest.