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Contrary to common belief, pillars 1 (AHV) and 2 (pension fund) are usually not enough to maintain your accustomed standard of living after retirement.
Women, in particular, often face gaps in pillars 1 and 2 – frequently without even realizing it. Women are more likely to work on a part-time basis or take career breaks. However, the pension system is designed for full-time employment. As a result, women tend to earn less on average over their lifetimes. This, in turn, means that in Switzerland women on average receive 31% less in pension income than their male counterparts.
Pillar 3 offers an additional way to build up retirement assets, close pension gaps in a targeted manner and, at the same time, optimize your tax situation. This way, you can secure your standard of living in retirement, even beyond AHV and pension fund benefits.
In this module, you will learn how private pension provision works, what distinguishes pillar 3a from pillar 3b and how to make targeted use of potential tax advantages under pillar 3.
Use private pension planning wisely: how pillar 3 works
Pillar 3 complements AHV and your occupational pension fund. It helps you secure your long-term standard of living – especially when gaps exist. There are two forms:
- Pillar 3a (restricted pension provision), where funds remain locked in until you reach retirement or specific exemptions apply.
- Pillar 3b (unrestricted pension provision), where most solutions allow you to freely access your money.
We explain the exact difference between pillar 3a and 3b further down.
Some pension solutions – especially in pillar 3b – combine saving with insurance, for example by adding extra coverage for disability or death. You can find out more about the associated costs and the differences between the various pillar 3a solutions here.
Which pillar 3 solution is right for you depends on your individual situation and your goals. We would be happy to advise you. Contact us for an appointment.
Anna's glossary: the ABCs of pillar 3
- Pillar 3a: Pillar 3a refers to restricted pension provision. It allows you to save assets for your retirement in an account or through an investment solution. In return, you benefit from tax advantages. The funds are generally tied up until you reach retirement or can only be accessed in certain defined exceptional cases.
- Pillar 3b: Pillar 3b refers to unrestricted pension provision. It allows you to build up additional assets in a flexible manner – for example with savings accounts, securities, insurance policies, real estate or precious metals. In contrast to pillar 3a, you can usually freely dispose of these funds, but only partially benefit from tax advantages with certain life insurance products.
- Maximum contribution: The maximum contribution refers to the legally defined maximum amount for payments into pillar 3a. This limit can vary depending on the contribution year in question and whether or not you are affiliated with a pension fund (i.e. whether you are employed or self-employed).
- Early withdrawal: An early withdraw means taking funds from your pillar 3a before reaching normal retirement age. This is only allowed in certain situations – for example when purchasing residential property for personal use, becoming self-employed or permanently leaving Switzerland.
- Promotion of home ownership: You are permitted to withdraw pillar 3a funds early in order to finance the purchase of owner-occupied residential property. This is referred to as the promotion of home ownership.
Pillar 3a: get to know restricted pension provision
With pillar 3a, you save voluntarily and in accordance with the legal regulations for your age. This helps you to build your assets and strengthen your financial future.
Depending on whether you are affiliated with a pension fund, different maximum contribution amounts apply. For 2025, these limits are:
- CHF 7,528 for employees with a pension fund
- Up to 20% of earned income up to a maximum of CHF 36,288 for self-employed individuals without a pension fund (e.g. self-employed)
Normally, you can withdraw your pillar 3a assets five years before reaching the reference age at the earliest. In certain cases, earlier withdrawal is also permitted, for example if you:
- purchase a home for your own use under the promotion of home ownership scheme,
- become self-employed,
- permanently leave Switzerland
- are at least 70% disabled.
You can either deposit the money in the traditional way into a savings account or invest in funds. The sooner you start saving for your retirement, the more beneficial investing in securities can be: with a long investment horizon, you benefit more from return opportunities and compound interest (earning returns on your returns).
Here is an example that shows how much investing can pay off: Jasmin, Lisa and Tanja each save CHF 500 per month over a period of 45 years.
Anna’s tip: plan smarter with pillar 3a
Many people fail to take full advantage of the potential of pillar 3. However, if you know how, pillar 3a is worthwhile in several ways: you can save for retirement and optimize your taxes at the same time.
Here are our tips:
- Make retroactive contributions to pillar 3a: were you unable or unwilling to make the maximum contribution into your pillar 3a last year? From 2026, you can also retroactively make up for missing payments in pillar 3a under certain conditions, but only if the gaps arose from the year 2025 onwards. This provides you with the opportunity to close gaps retroactively and to benefit from an additional tax advantage.
- Retirement planning in a partnership: whether both or only one partner is working, we recommend making retirement provisions for both of you. Check how you can support each other, for example by making deposits into your partner’s 3a account if you are both working.
- Invest early: the earlier you start investing within pillar 3a, the more you will benefit from compound interest. My colleagues would be happy to help you identify the right investment strategy for you. Contact us for an appointment.
Background: optimize taxes with pillar 3
Pillar 3b: get to know unrestricted pension provision
Pillar 3b represents a flexible complement to your pension provision. It helps you to build additional assets – completely independent of AHV, pension funds or pillar 3a.
In contrast to restricted pension provision (pillar 3a), with pillar 3b you usually have free access to your money. This makes it especially suitable for long-term savings, medium-term investing or targeted asset accumulation alongside your traditional pension planning. Many also use pillar 3b to secure additional protection in the event of death or disability.
A comparison of the two parts of pillar 3:
Comparison | Comparison | Pillar 3a (restricted) | Pillar 3a (restricted) | Pillar 3b (unrestricted) | Pillar 3b (unrestricted) |
|---|---|---|---|---|---|
Comparison | Purpose | Pillar 3a (restricted) | Retirement provision, asset accumulation, closing gaps | Pillar 3b (unrestricted) | Unrestricted savings, additional asset accumulation |
Comparison | Tax benefits | Pillar 3a (restricted) | Contributions fully deductible from taxable income | Pillar 3b (unrestricted) | Only for life insurance under certain circumstances |
Comparison | Availability | Pillar 3a (restricted) | Tied up until a maximum of five years before the reference age; earlier withdrawals only permitted in defined cases | Pillar 3b (unrestricted) | Available at any time (individual terms and contractual conditions apply) |
Comparison | Maximum contribution (2025) | Pillar 3a (restricted) | CHF 7,258 (with pension fund) / CHF 36,288 (without pension fund) | Pillar 3b (unrestricted) | No legal limit |
Comparison | Product solutions | Pillar 3a (restricted) | Savings account or securities solutions | Pillar 3b (unrestricted) | Savings accounts, securities, insurance policies, etc. |
Comparison | Additional protection | Pillar 3a (restricted) | Can be combined with death or disability insurance | Pillar 3b (unrestricted) | Can be combined with insurance solutions |
With the right combination from pillar 3a and 3b, you create greater flexibility, tax advantages and financial security. Our experts would be happy to advise you personally. Feel free to contact us.
Clients ask – Anna answers
Helpful tools
Helpful tools
Pillar 3a tax calculator
With pillar 3a, you benefit twice over: by securing your retirement and reducing your tax burden. Calculate how much you can optimize your taxes.
Helpful tools
Helpful tools
Pillar 3a asset calculator
Starting out early allows you to build substantial wealth in pillar 3a over time. Use our asset calculator to find out exactly how much.
Further articles on the topic
You are here on your personal learning path
- Module 4Optimizing pillar 3: private retirement savings
Women’s Wealth Academy
Women who actively take care of their finances increase their chances of achieving financial security and are more optimistic about their future. Take your finances into your own hands.