It’s 10 years.
1 Like
Isn’t the effort involved in implementing this for 3a providers enormous?
According to the regulation:
- Customer must apply for this in writing (manual process)
- Customer must provide various information (manual process)
- 3a Provider must keep the information for 10 years
- 3a Provider must provide the information to new provider (manual process)
- Tax authorities must control this etc. (manual process)
I mean: Sure, it’s not all that much. But VIAC and co. currently only exist because not so much manual work is necessary per customer. I know, for example, that True Wealth doesn’t do this itself these days for early capital withdrawals, but outsources it. These are all costs that have to be covered somehow and makes it more complicated for new providers to enter the market. It also makes it more complex for the user to understand how 3a works and what is possible with it (the financial advisory industry is certainly pleased).
I am a fan of: Keep it simple, stupid.
8 Likes
I didn’t realize this, but that applies to us as well (doing renovations this and next year). A good new tool to further tax-optimize as homeowner, especially as a married couple. Reducing your income by 28’224 (4*7056.-) is pretty significant.
1 Like
I think you might be overestimating the tax benefit of delaying payments. I would recommend to do the math as results might not be obvious
Pro -: yes you can achieve a higher tax saving but it depends on marginal tax rate at time of contribution. If marginal tax rate of 7000 or 14000 is the same, then it wouldn’t result in much advantage.
Con -: you are losing out time value of tax benefit which could have been invested in private investments
I think we should use this option to backfill in case some of the years there wasn’t enough liquidity. But trying to use this option as tax optimization seems a bit too much
1 Like
Agree. If this leads to higher management costs, it would be a shame.
1 Like
I didn’t know about this. I just read an article here Rachats ultérieurs dans le 3e pilier dès le 1er janvier 2025 | Allnews which says that this is possible! I wonder if this is possible to buy back what you used for a house purchase as well?
For 3a -: I think the regulation change was about buying back missing contributions.
I don’t remember seeing anything about buying back after taking out money for house purchases.
1 Like
Oh no, that would be a huge loophole.
You can (and sometimes must) pay back withdrawn contributions to the second pillar, but you don’t save your normal marginal income tax, you get back the reduced tax that you paid upon withdrawal.
2 Likes
Well yes indeed, in order to do ‘rachat’ 2nd pillar to reduce your tax, you must pay back what you took out of it first.
Yes that I know.
But we are talking about 3a. Right?
1 Like
Seen by chance on Linkedin today:
Mit der neuen Verordnung BVV3 hat der Bundesrat jedoch ein weiteres Bürokratiemonster verabschiedet. Die 3a-Vorsorgestiftungen werden wohl hoffen, dass möglichst wenige Gesuche um Annahme von als Einkauf geleisteten Beiträge eintreffen werden.
Und die Steuerämter? Akzeptieren sie den Einkauf von geleisteten Beiträgen im Rahmen der Selbstdeklaration gegenüber der 3a-Vorsorgestiftung?
Is that really on the Federal Council? The idea of buybacks in 3a came from the Council of States and that was always going to take away the beautiful simplicity of 3a, where nobody had to track anything but the total amount contributed in any given year, creating administrative load.
3 Likes
The easiest way might be to do it by value/age. But even this would change things e.g. if you were working or not, or self-employed.
You could simplify and calculate the theoretical maximum and employed person at a given age could have contributed and then have a table of max contribution per age (maybe with some pro forma % gains) and then if your 3a balances are less than this, you can contribute extra.
This way, you don’t need to track history, but you have some distortion e.g. for those who are self-employed. It would also create a loophole for those who withdraw to buy house etc. and then could theoretically backfill these amounts.
So maybe it is too complicated unless you want to introduce loopholes or have some amount of tracking at least for withdrawals.
This table already exists for the purpose of pillar 2 buy-ins (in case you were ever self-employed, your buy-in maximum will be reduced if your pillar 3a balance is higher than the value from the table).
1 Like
Systems tracking the total amount in 3a become more complicated when you factor in early withdrawals for home ownership or others. Those would have to be tracked too and since we can switch 3a providers as we see fit and even liquidate our 3a completely in the process, some institution would have to gather and centralize that data.
Edit: It would also have to track all of our 3a accounts to make sure we aren’t hiding any when doing a buyback. Since we can transfer accounts at will, the tax offices don’t currently have that information.
Edit 2: I’ll maintain that the system was bad from the start and solves a problem that didn’t require solving as it supports people based on somewhat random sets of circumstances.
Since everything is linked with AHV number, how difficult can it be to consolidate 3a amounts?
For the self employed part, I agree it can be tough to track. But most likely it would also be in AHV status -: self employed, employed , unemployed
Having worked in a public administration where different services work with similar data or data that needs to be coordinated and is actually linked by a single reference number to which all the relevant services have access, I would say it’s very easy in theory and very hard in practice.
Having worked in several small private practices too, the situation was no better there. Quality systems and database treatment are near criminally negligent.
People just won’t work like that, forcing them to would be a very big endeavour (as painful as I think it is because, really, it doesn’t even require that much skill, awareness and willingness to comply with what is needed to have the system work).
2 Likes
Interesting
You need to ask: who has an interest in this information? 3a pillar providers don’t care, and even today you can easily pay in too much in a given year.
The real people who care about this are the tax authorities. I’m sure they will track this for you, and not allow extra deductions to which you’re not entitled.
Only 2 things are certain in this world: death and taxes 
1 Like
Study from UBS on tax implications of retroactive contributions: Link.
3 Likes