I saw this quote and wonderered whether people employ different strategies within their 3a vs outside of it?
For example, I could imagine that one might have more income stocks in the 3a where there is reduced tax leakage from dividends, whereas outside of it, this might be avoided.
What do you do?
I aim for the same strategy in 3a and outside 3a to keep things balanced and a bit simpler. Although, I do have a few investments that are not available in 3a and I do compensate that with slightly higher allocations outside 3a.
You may be interested in Splitting the world
Hereâs an interesting thread about it â Splitting the world
Personally I donât optimize that, for 3a I invest in the quality fund at finpension and simple Global 100 at VIAC. Outside 3a itâs Fundsmith large and small cap funds.
I try to keep it as simple as possible for the moment and will start with stock picking once I reach a reasonable portfolio size.
Personaly, Iâve took the easiest setup for now: VT + Global 100 on my 4 accounts in VIAC. It might change next year as I want to try the quality setup in Finpension for my last 3a account (maybe).
I think there was another thread on the topic earlier.
I hold "dev ex US " in 3rd pillars, US and EM on IBKR.
(For âdividend WHT efficiencyâ purposes)
I do the same. Thus VTI instead of VT.
As per the law, there is a maximum amount that the third pillar shall have. The law already foresees contribution limitations on the second pillar - that kick in if you had too much funds on your third pillar. These are (currently) just not enforced. Given another 40 years or so until withdrawal - it may happen that these get adhered to and (given the legal linkage among second and third pillar) it could be extended to third pillar. Meaning that excessive third pilar amounts could lead to a situation where you are not allowed to invest more.
To male things more complicated. The Swiss Pension INSURANCE system foresees the concept of over-coverage. Meaning that benefits can be capped if they lead to an excessive pay-out. It is rare to happen im the second Pillar but there are cases already. We need to remember that 3a is, de-facto a cash payment insurance but not a savings account as-such. You could see it as an insurance with variable (but potentially capped?) benefit where you (on behalf of the insurer) inform and manage the asset allocation. Same there - currently zero risk but what do I know would happen in 30 years? Of anything goes terribly wrong - a new government may decide that windfall asset returns beyond the foreseen max 3a amount belong to the insurance but not the insured (aka belonged to e.g. the second pillar securety scheme or the first pillar reserve fund).
Long story short - I only use a moderate 3a allocation (40-45% shares). It does push me beyond the max 3a amount (aready quite a bit beyond) but I donât see any benefit of taking more risk in my 3a.
Donât mix 3a up with a tax deferred savings plan and dpnt get the illusion that this was your money - you have an insurance entitlement only and you influence the asset allocation & brokerage bank how the insurer (the Swiss government) manages the reserve capital used to secure your entitlement. 3a IS NOT your money.
Do you have the cases number?
Can you be more specific especially what laws exactly state what you mention? I have never heard of any connection between how much you have in your 2nd and 3rd pillar and implications with each other.
âDer Höchstbetrag der Einkaufssumme reduziert sich um ein Guthaben in der SĂ€ule 3a, soweit es die aufgezinste Summe der jĂ€hrlichen gemĂ€ss Artikel 7 Absatz 1 Buchstabe a der Verordnung vom 13. November 1985 ĂŒber die steuerliche Abzugsberechtigung fĂŒr BeitrĂ€ge an anerkannte Vorsorgeformen vom Einkommen höchstens abziehbaren BeitrĂ€ge ab vollendetem 24. Altersjahr der versicherten Person ĂŒbersteigt. Bei der Aufzinsung kommen die jeweils gĂŒltigen BVG-MindestzinssĂ€tze zur Anwendung.â
Okay I see thanks for searching the article. If I read correcly according to SR 831.461.3 - Verordnung vom 13. November 1985 ĂŒber die steuerliche Abzugsberechtigung fĂŒr BeitrĂ€ge an anerkannte Vorsorgeformen (BVV 3) (admin.ch) you can use your 3a money for voluntary 2nd pillar contributions which would mean you can then again pay money into 3a/ fully invest and not be worried about growing too much.
I disagree. Do you have a source for that?
Art. 1 BVV 3 recognizes two options for pillar 3a. 1a is an insurance but 1b is a âgebundene Vorsorgevereinbarung mit Bankstiftungenâ, which is clarified in paragraph 3:
Als gebundene Vorsorgevereinbarungen gelten besondere SparvertrÀge, die mit Bankstiftungen abgeschlossen werden und ausschliesslich und unwiderruflich der Vorsorge dienen.
Itâs a savings agreement, not an insurance. The paragraph 3 mentions also that it can be supplemented with an insurance but I donât see the basic savings agreement characterized as an insurance anywhere.
Youâre right about the maximum pillar 2 buy-in being reduced by pillar 3a capital above the maximum according to a certain table. However, Iâm not aware of any indication why this would make 3a capital above that threshold any less my property. I have a multiple of the tableâs value in my 3a but thatâs completely expected as Iâm self-employed without pillar 2. I.e., that table is solely for the purpose of pillar 2 buy-in, not about what belongs to you in pillar 3a.
There is always a risk of future law changes making things worse. However, I think the risk of disappropriation of pillar 3a capital is not any bigger than disappropriation of regular bank accounts. I would assess the risk of additional restrictions in pillar 2 much higher.
Just remember that there is a 3y restriction before taking it back as capital from p.f., as well as potentially losing some of it in case of death depending on your p.fâŠ.so worth triple checking.
Agree that itâs a strategic move 3-5y before pension that could be great to use.