May I ask you if I can put 3a pillars in two places, for eg, Finpension and other one?
I know I will get tax benefit one only one. But I want to understand if I do in two places then is there any pros and cons on putting maximum amount in two pillars in one year?
No pros normally, unless:
- one is domiciled in a tax advantaged canton, in which case, you should move all to that account.
- you got referral bonus in both and using both lowers your overall management expense
Having multiple accounts, however, even with the same provider, have the advantage of staggered withdrawal.
The con is management and when it comes to closing accounts, you pay the account closure fees twice.
Hope this helps.
You can’t (not legal). You can only pay up to the legal amount per year.
You can distribute between different providers, but not contribute more than the limit.
Is it not that you can pay in as much as you want, but can only get the tax deduction for the max prescribed amount?
Edit: Nope. Thanks for the correction
5.1, it’s very clear this isnt allowed.
Absolutely not. You are not allowed to pay more to 3rd pillar and if you overpay, 3a foundation must reimburse the excess. And I guess if you invest these money, then it’s getting really messy.
The pros of using more than one retirement foundation (in my opinion):
Pillar 3a assets enjoy only modest protection from Swiss depositor protection, because they are classified as privileged assets, but are not covered by the Esisuisse guarantee. That sets them apat from pension benefits, which are protected against pension fund bankruptcy by the LOB Guarantee Fund, to some extent.
Holding your pillar 3a assets at more than one retirement foundation can help minimize the risk of losses resulting from bankruptcies. This risk may be relatively small right now, but when it comes to retirement savings, it pays to think long-term.
- Portfolio variables (if you invest)
Factors which affect overall performance vary between service providers. Although the flat fees, and the instruments (e.g. ETFs) used are a good indicator of performance, there are other things like the way currency conversions are handled, how frequently portfolios are rebalanced, etc. which are much more difficult to track.
Unless you can access and carefully analyze all relevant information, it can be better to put your eggs in more than one basket and then compare performance across all portfolios after a given time frame.
The cons of using more than one retirement foundation (in my opinion):
1. Tracking payments
The main con of using more than one foundation is the possibility of confusion with regards to pillar 3a limits. But if you track your payments and assets in an Excel sheet or similar, this shouldn’t be an issue.
2. Withdrawal fees
If you use service providers which charge a fee for early withdrawals (for home purchases, for example), you may end up having to pay multiple withdrawal fees instead of just one.
in fact, you need to work 100% to pay the maximum otherwise the tax authority will give you a letter to take it back.
I don’t know where you have this information from, but I have tons of empirical evidence of the opposite.
I’m not sure I understand you correctly, but you can also put the maximum amount (6883 CHF) when you’re working part time.
sorry I mean employed.
Not sure if you stop working or go to the RAV, you cannot send the maximum
„Arbeitnehmer und Selbständigerwerbende können bei den direkten Steuern von Bund, Kantonen und Gemeinden ihre Beiträge an anerkannte Vorsorgeformen in folgendem Umfang von ihrem Einkommen abziehen:
jährlich bis 8 Prozent des oberen Grenzbetrages nach Artikel 8 Absatz 1 BVG, wenn sie einer Vorsorgeeinrichtung nach Artikel 80 BVG angehören; (CHF 6’883)
jährlich bis 20 Prozent des Erwerbseinkommens, jedoch höchstens bis 40 Prozent des oberen Grenzbetrages nach Artikel 8 Absatz 1 BVG, wenn sie keiner Vorsorgeeinrichtung nach Artikel 80 BVG angehören.“ (CHF 34’416)
I don’t see any salary dependence for people with the 2nd pillar.
Thank you guys.
So all in all I cannot invest maximum amount in two 3a places. Right? I can only put half in one and half in other. Even if I do that one has to give me back the 3a amount?
Hope I grasped the answers right.
Correct. The legal maximum applies to the sum of contributions across all accounts. You can split it up but not exceed it.
What do you mean exactly?
It doesn’t say that one is not allowed to contribute max amount to 3a if one is not 100% employed or if the income is below a certain threshold.
Anyone who earns an OASI-eligible income can use the pillar 3a, and can contribute up to the maximum annual contribution.
Your work-hours have nothing to do with eligibility.
If you earn a salary of 2300 francs per year or more, you (and your employer) have to pay OASI contributions. If you are a domestic worker, you have pay OASI contributions from the first franc, as the 2300-franc exemption does not apply.
So if you earn more than 2300 francs per year from one employer (or any amount from one employer per year if you are a domestic worker), then you can pay into the pillar 3a, up to the annual maximum limit.
…which does seem to depend on your employment income (unless you’re subject to pension fund insurance).
Put differently, if you earn, for example, 300 CHF/month, you can only contribute much less than 6883 CHF to pillar 3a.
…unless I am missing something? Sure, this will be irrelevant for almost anyone anyway - unless you’re indeed semi-retired early and trying to optimise your taxes - then again that’s what this forum is about, isn’t it?
In theory, you can pay into your 3rd pillar account with funds coming from your wealth, received donation, capital gains, etc. However, in practice you would have no tax benefits (even a tax penalty when withdrawing) so it would be silly.