Pillar 3a - In the future maybe additional payment possible

Good news for those who were not able to exploit the full potential of pillar 3a at a young age. The National Council has approved a motion to allow subsequent payments. Let’s see if this goes through. This would be a grwat opportunity to save some taxes :slight_smile:

Source (in German) : https://www.google.com/amp/s/www.cash.ch/news/politik/vorsorge-der-nationalrat-ist-fuer-hoehere-einzahlungen-die-saeule-3a-1555942%3Famp

https://www.parlament.ch/de/ratsbetrieb/suche-curia-vista/geschaeft?AffairId=20193702

8 Likes

Wow great news!

I will use this for sure.

Great news. However, I still hope this will be limited from the date of arrival in Switzerland. I think it’s not fair, if new citizen would be able to deduct years outside of Switzerland.
There was the same issue with pillar 2, so a limitation was included.

Sounds complex. There would be a need to add some tracking to account for early withdrawals (home acquisition) and, if I understand it properly, the available amount would be calculated on the basis of the current balance of the accounts, so a register of the different accounts should somehow be made (unless it already exists?) and it would not benefit much people who have their 3A invested in stocks, who should carry a bigger balance than what they can additionaly contribute. Unless we take advantage of stocks drawdowns to hope that it goes low enough to allow some buyback.

All in all, I’m not a fan. I like the opportunity and would definitely try to profit from it but it seems to add an unnecessary layer of bureaucracy to a system that is, nowadays, quite simple.

ETA: also, what is this argument ? Few people are able to contribute more than the maximum available amount, so it’s not useful to raise that limit, but we should make it so that some people - not necessarily those who would have enough savings to use the additionnal possibility - get that very same possibility (to contribute more than the yearly possible amount) under a certain set of circumstances? What has happened to “keep it simple” ? Raising the maximum available contributions would reach the same purpose without the bureaucracy…

3 Likes

It’s would be the amount put on the account, not the current balance of the account.

Are you sure? “Guthaben/avoirs” give me an impression that it refers to the actual current balance, though you may be right that it might be used for the amount that has been contributed up to a certain date.

In fact, it’s not clear. We need to wait how it will be put in place.

As mentioned here, apparently it doesn’t (yet).

1 Like

Hi there

A motion in the large chamber of parliament was approved that obliges the Federal Council to create a possibility for buying into the pillar 3a, like we can do for the 2nd pillar (Pension fund).
You can pay in every 5 years up to a maximum 34000 CHF to compensate for years where you did not pay in the maximum amount.

It’s not a law yet, but it’s worth keeping an eye on.

6 Likes

It’s pretty much a done deal. There isn’t much the Bundesrat could alter. It’s just a question of how long they will take to implement it.

For anyone who needs more information in English:
https://www.moneyland.ch/en/pillar-3a-contributions-in-arrears

3 Likes

Can’t wait for it! I hope they ditch the every 5 years idea. I would contribute 2xMax every year till my gap (~60k) is closed.

I hope so too. because I didn’t put anything for my first 10 years in Switzerland, being a student, then PhD and then still ignorant postdoc :slight_smile: So my gap would be 6826 x 10 CHF. Making a 2-3xMax contribution over next 5 years might actually be more tax beneficial.

1 Like

Yeah a 35k contribution in just 1 year would be very tax-inefficient. But maybe that’s why they want to do it like that. Otherwise they might lose too much on taxes.

1 Like

From the moneyland article:

“Opponents of the motion claim that the new pillar 3a rules primarily benefit wealthy individuals with incomes above 100,000 francs per year.”

That is most likely true.
But they don’t know mustachians like me who earn less than 100 K and can still fill up a 10 year hole in 3a within 18 months. Though the tax benefit would not be that great.
Maybe I should get a higher paying job to make better use of this new 3a rule. :thinking:

3 Likes

This is very good news, even with the once-every-5-years constraint. In the end this just gives extra flexibility, nobody will be worse off but (possibly) the Swiss tax office.

The left will never get that the only people that could pay less taxes are the one who pay taxes.

3 Likes

I didn’t find a number - how far back could one “backtrack”?
From entering CH, from age of 25, from in-payment eligibility like Pillar 2?

2 Likes

Probably, the official document that says whether you did or did not contribute to pillar 3a are your past tax declarations. And those must be kept for 15 years (see link below) so that might be the longest time you are allowed to fill past gaps?

https://www.ch.ch/de/steuererklarung-ausfullen/#aufbewahren-von-steuerunterlagen

Not sure that would help in answering, as I am in a situation like presumably plenty of the people here - expat coming to CH for work/study in the recent past.
Plus I only started filing my own taxes this year for 2019, on QS until then, so kept history doesn’t mean much. :slight_smile:

I guess the answer could be deduced from knowing what is the time when one is allowed to start paying into 3rd pillar?
I believe it starts from “being employable”? [1]
But then I would suppose for immigrants there could be a different limitation, e.g date of entry or such.

E.g. @covfefe had an idea to pay retroactively to the times when he was a student in CH - but not sure if that works if the condition would be to be (self-)employed?
If one has a student job next to her/his studies, one is technically “employable”, or? :grin:

Edit: “employable” definition here: https://www.bfs.admin.ch/bfs/de/home/statistiken/arbeit-erwerb/erwerbstaetigkeit-arbeitszeit/erwerbstaetige.html


[1]
https://www.ch.ch/de/dritte-saule

Einzahlen in die Säule 3a – Maximalbetrag pro Jahr
Alle Erwerbstätigen haben die Möglichkeit, einen bestimmten Betrag pro Jahr auf das Vorsorgekonto 3a bei ihrer Bank oder ihrer Versicherung einzubezahlen.

Any reason why they’d pick a different setup than for pillar 2 buyback? (iirc 24 year is the limit)

1 Like
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, vous confirmez avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/