Looking for a 3b pillar to invest into

Banks, Insurances & Third Pillar
1

I´ve recently moved to Geneva where a 3b pillar is tax deductible up to 2200chf/year.

Can anyone recommend a 3b pillar where I could invest into? Preferably a passive low-cost index type fund. UBS doesn´t offer 3b anymore, and Credit Agricole will only offer via life-assurance products.

Many thanks!

2

What would be the advantage of 3b vs. your personal non-tax-advantaged brokerage account?

Edit: Sorry, my brain completely missed that first point.

Any limitations about exiting it? “Surrender values” and such (although I guess those are related to life insurance-tied solutions)?

3

Well, you´d save about 800chf per year in taxes right?

4

As I understand 3b has to be life insurance so even in Geneva I’m not sure its worth it.

Maybe if you had young kids and wanted some term life insurance or something. But for investing I have not heard of it being practical.

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5

when I was looking for something for me, I found this offer from Axa

Funds list available for SmartFlex Liste des fonds | AXA

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6

Did you reach a conclusion if it is worthwhile ?

I have life and invalidity insurance through my employer’s 2nd pillar so I am only interested in the tax saving. I started looking into this several times but it seems complex and opaque for low investment and being honest I lost interest

7

Maybe check the french AVs (if they’re eligible, they might be). They have much cheaper pure equity ones.

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8

Hi alanmack,

The term pillar 3b is used by insurance companies to denote insurances which fall under the tax deduction for health, life, and disability insurance.

The problem is: This tax deduction is already nearly or fully taken up by your premiums for mandatory health insurance. So unless you have very low health insurance premiums (lower than is possible in Geneva, except possibly with premium reductions), pillar 3b insurance has zero tax benefit.

There is talk of raising the tax deduction to 3000 francs (6000 for couples), so if that happens, there will be a little more room to benefit.

My personal recommendation is that you stay away from permanent life insurance (the kind with cash value, which insurance companies market as a retirement saving and investment solution). It is inflexible and there are much cheaper ways to invest. Instead, use a cheap stock broker to invest in ETFs (or a cheap robo-advisor if you don’t like investing on your own). If you don’t want the risks of investing, then savings accounts and/or medium-term notes are good fixed-income options.

There are useful insurances - namely supplemental health insurance, term life insurance, disability insurance - which can make sense in some cases. If you have any of these and your mandatory health insurance premiums do not use up the full tax deduction, you can include their premiums to use up the full deduction. In the case of term life and disability insurances, you will have to get the pillar 3b versions (not the pillar 3a) to include them in the deduction for health, life, and disability insurance.

For retirement saving, the pillar 3a is a much more sensible vehicle, as both your income and wealth taxes benefit.

If you have extra money which you want to save for retirement on a tax-privileged basis in order to lower your taxes, then making voluntary contributions to your occupational pension fund (pillar 2) is an option.

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9

I was only interested by the savings side, as well as the tax deduction in the canton of Geneva.

I didn’t open it. The tax savings weren’t worth the hassle of opening a new investment account and transferring CHF 200/month.

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