What you need to know about pillar 3a

Whether you are planning for retirement or hoping to buy a home someday, the pillar 3a offers many advantages. We have summarised the most important points about tied pension provision for you in this blog.

Let's do a thought experiment: Imagine fast-forwarding a few decades in your life, as if you had a magical pocket watch. And voilà: You are over 65 years old and retired. This means, among other things, goodbye work. You have significantly more time, but your monthly salary is also gone. To ensure that you can continue to live comfortably at home, travel to distant countries and generally enjoy life, pillar 3a plays an important role.

In Switzerland, pension provision is based on a three-pillar system and ensures that people in Switzerland are financially secure in old age, in the event of disability or in the event of death. State and occupational pensions (pillars 1 and 2) are compulsory and are supplemented by private, voluntary pensions (pillar 3). These three pillars are interlinked and together form the foundation of our social and financial security. In this blog, we explain the Swiss three-pillar system in detail.

Good reasons for pillar 3a

Because the first two pillars are compulsory, one might think that they should be sufficient for retirement. In reality, however, the situation is different: experience shows that AHV and pension funds together only cover around 60% of your previous income – and this often means that you cannot maintain your accustomed standard of living in full. Pillar 3a exists to close this gap.

Pillar 3a is subsidised by the federal government. This means that you can deduct your contributions from your taxable income and your accumulated 3a assets are exempt from wealth tax. You can contribute up to a maximum amount set by the federal government each year. The money remains tied up until retirement – hence the name ‘tied pension provision’. In some exceptional cases, earlier withdrawal is possible, as we explain in the next section.

How much you can contribute and when

Assuming we have piqued your interest and you want to regularly contribute to the third pillar in the future – like 62 percent of Swiss people between 25 and 64 years of age do. Then the rule applies: You can contribute from the age of 18 and up to the official retirement age or even five years longer if you continue working. There is also a maximum amount per year: for 2025, this is 7'258 CHF for employees. Self-employed persons and employees without a pension fund can contribute 20% of their income (up to an annual maximum of 36'288 CHF).

In which cases can you withdraw your money?

• The money in pillar 3a is tied and cannot be withdrawn at will. The most common option is to withdraw it upon retirement.

• Under certain conditions, it is possible to withdraw your 3a money early. This is possible if:

• you buy a house or apartment,

• you become self-employed,

• you move your residence abroad,

• you become disabled,

• you transfer your 3a assets to a pension fund.

• In the event of death, your 3a assets go to contractually designated beneficiaries, such as your partner or your children.

Patience leads to success

Your money for pillar 3a can be invested differently with most providers, from the classic savings account to funds. In a savings account, your money is held in cash, i.e., not invested. In funds, however, it is actually invested. The most common option is investing in funds, because this way you achieve returns on your invested money – in other words: your money works for you.

After a few years, this becomes particularly noticeable through the compound interest effect. Simply put: Your invested money earns interest, which in turn earns interest itself – almost like money making more money for you. Long-term investing also balances the volatility of the funds, i.e., the ups and downs of the markets. Therefore, it pays to start early and not constantly change the investment strategy. Instead, give your money time to work for you.

Curious to find out how much wealth you could build up with pillar 3a? With our calculator, you can easily see the potential your contributions could generate over the years.

Paying retroactively into pillar 3a for past years

Finally, there is another important change regarding the third pillar, namely the possibility of retroactively paying into pillar 3a. As of January 2026, it will be possible to pay retroactively for up to ten years into pillar 3a and deduct it for tax purposes. Of course, this will also be possible with us. 

However, there are a few things to keep in mind: 

• The 10-year calculation starts only from 2026. In other words: In 2026, you can pay retroactively for 2025 and in 2035 you can also pay for 2025. 

• The retroactive payment is only possible if the maximum amount for the current year has already been fully utilised. 

• Once you have started to withdraw your 3a assets, a retroactive payment is no longer possible.

• If you have reached the official retirement age but have not yet withdrawn anything from your 3a account, a retroactive payment is still possible up to five years after retirement age.

If you want to know more about this, we recommend this page of the Confederation. There you will find the exact wording of the legal provision and more information. 

neon pillar 3a

With neon pillar 3a, you can plan for the future in a relaxed and affordable way – seamlessly integrated into your neon app. But see for yourself: you can find all the information about our pillar 3a here. And if you're interested in how we compare with other 3a providers on the market, you can read our 3a comparison here.