That’s an awful lot of data keeping and compiling to do on an individual basis to ensure that doesn’t happen.
Easier is for Kantons/Gemeinden to set their tax rates, including 3a tax rate, for it not to happen.
I still think if the case actually happens in real life, it is a very fringe one. Once again, I doubt someone with a low income would max their 3a every year and put it all in a high risk, high reward asset for a long enough period of time for it to compound to a 2 millions amount while maintaining the discipline necessary not to fiddle with it too much inbetween and lose part of the gains. It could happen by sheer luck but that would be a very lucky winner for whom the tax burden should be a lesser concern.
I’d also be careful what I wish for, one solution out of this situation would be to reverse to more control on what the 3a solutions are invested in, with a cap on stocks (and no cryptos), making it virtually impossible to reach a 2 millions target.
Another way to look at the same numbers would be, that 24% do not have a significant gap and therefore will not significantly benefit. The other 76% have a gap and would appreciate the chance of closing the gap later in life.
If it comes to a vote I hope the pro camp can push something like this: For whatever reason you are now unable pay into the 3a. Under current rules this creates a widening gap to “the rich”, which you will never be able to close. Vote yes and get the chance to close the gap later in life, and still benefit from the full tax incentives that now only “the rich” cash in every year. Vote yes for a flexible system that allows for different career progressions & baby breaks and catch up whenever you want! Vote yes now!
As for the total number paying into 3a, if it is filtered for people in employment it is more like 60%+ (at least per gov stats). Within that you have segment that doesn’t earn much now, but expects to have more in the future. Maybe your 24% is just the current cohort able to pay in the max.
Agreed. Still, will be interesting to see if the pro-camp can find a counter-narrative from the same set of numbers. Maybe we should form the ‘Mustachian Party’, poach some voters from SVP & FDP, add some green stuff to the mix and we’re set!
It’s not a matter of it being a millionaire being affected by it or not, I’m thinking of opportunity cost. Such a reform would require a lot of time and energy for very, very few cases that don’t end up in a dramatic outcome. I’m working in a risk assessment/mitigation field, we deal primarily with risks that either have a high probability of occurrence, or a higher end impact if they were to occur, or a combination of a lesser amount of both. There are so many things to do that lesser risks don’t justify us spending time and resources on.
This is a similar issue. We can try to aim for perfect and spend time and energy trying to correct this issue, or our legislators can try and spend it treating issues that affect a lot of people, or that end up with people becoming destitute.
One of the key reflexions behind these kinds of thinking is that it allows for more optimization of the use of state resources. State resources aren’t free, they come from taxes. We can either solve other problems than this issue, or solve this issue if we deem it essential, but trying to do both means we would need more taxes. I’d rather have everybody paying less taxes than having a few people in a non life threatening situation being taken care of by the state (they have the means to identify this issue and avoid over investing in their 3a and will very likely be directed toward it by their 3a provider(s)) and everybody paying more taxes.
How does it look if you add wealth tax & wealth based AHV contributions after FIRE into the mix? The total equation is a bit more complex. I suspect if you leave the “it shouldn’t be land” alone for now, just look at final numbers and assume that you will be a little clever when retiring, 3a is hard to beat.
Please, do not associate me with that. Call it whatever you want but leave Mustachianism and FIRE out of it, you have no legitimacy to talk for the movement, nor do I.
There is unlikely to be a vote because this is not a change of a law, but of an ordinance (Verordnung). These are not subject to a referendum.
According to the article here the earliest probable year is 2024.
„Ich befürchte, dass nochmals einige Zeit ins Land geht, bis die mittels der Motion von Erich Ettlin angestossenen nachträglichen Einkäufe in die Säule 3a dann wirklich vom Bundesrat umgesetzt werden. Ständerat Erich Ettlin, den ich ebenfalls kontaktiert habe, rechnet damit, dass «vermutlich mit Inkrafttreten auf 1.1.2024 zu rechnen ist». Die politischen Mühlen drehen offensichtlich langsam – im Falle einer sinnvollen Stärkung der freiwilligen Altersvorsorge aus meiner Sicht viel zu langsam.“
There could be further delay if someone manages to force the change to be treated within a broader reform package. Then it could take years. Don’t build your future on this change just yet.
From what I understand, it seems relatively straightforward. You can contribute
every five years
a maximum amount of about 34k (same as yearly maximum for people without pension fund insurance, not sure if 20% rule applies)
until you reach the maximum 3a balance according to the BSV table for employees with pension fund coverage)
In other words, your potential contribution is
maximum 3a benefits according to BSV table*
less 3a balance you already have
capped at 34k something Francs (regularly adjusted)
* which are calculated assuming that you‘ve made the maximum yearly inpayments for people with pension fund coverage every year.
It will probably make more sense to set up something complete new (e.g. pillar 4) where you can set the standards from the beginning, as for instance trackability as for pension funds.
One thing which has not been talked about, and which could save a whole ton of administrative cost is the fusion of 2nd pillar and 3a into some 401 k type plan.
The second pillar is too expensive if you compare it to other countries (like Sweden having a statefund with higher return + lower running cost.
Then the companies can focus on their core business (Risk insurance like extended invalidity and life term insurance). But I guess some lobbies would strongly advocate against.
Dream on.
We can’t even raise the retirement age by one year, or get a 2nd pillar law that reflects the current living trends (single, part time, longer study times).
No matter what you propose, 3/4 of the population get enraged.
I’ll be glad if even a modest reform like this gets through.
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But let’s keep the thread on 3a. 
