Pillar 3b: flexible retirement provision
Pillar 3b life insurance combines a savings component with insurance cover. In doing so, you not only build up capital, but also protect yourself and your family against risks in the event of death or incapacity to work. Unlike pillar 3a, you have more freedom of choice: you decide how much you want to pay in, how long the policy runs and what your savings goal is.
What is pillar 3b?
Pillar 3b, also known as unrestricted pension provision, is part of private retirement provision in Switzerland. The pillar 3b pension solutions can be flexibly adapted to your savings goals and needs. This makes it the ideal complement to pillar 3a.
Pillar 3b ...
- is more flexible than pillar 3a and is therefore also referred to as unrestricted pension provision.
- has no maximum annual contributions. However, the contributions cannot be deducted from taxes.
- can also be used for medium- or long-term savings goals.
- allows you to access the money from your pillar 3b at any time in principle – but please note the contractual provisions of the chosen solution.
What are the benefits of pillar 3b?
Pillar 3b of retirement provision in Switzerland offers many advantages:
Unlike with pillar 3a, contributions to pillar 3b cannot be deducted from taxes. In return, you usually benefit from a tax-free payment.
You decide how much you want to pay into pillar 3b each year and how long your policy will run. The beneficiary can also be chosen freely.
The unrestricted pillar 3b pension provision can be used for a variety of purposes, such as continuing education and training, getting married or buying into a pension fund. It is not limited to retirement provision.
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Questions and answers: life insurance and pillar 3b
Endowment life insurance offers both financial protection in the event of death or disability as well as a savings component. It thus combines the benefits of life insurance with the opportunity to build up assets.
With this type of insurance, you pay regular premiums that are partly used for insurance cover and partly for capital accumulation. You will receive the capital you have saved at the end of the contract term. If you die before the end of the contract period, a pre-determined amount will be paid to the beneficiary. The beneficiary can be chosen freely.
3b insurance is insurance in pillar 3b. Pillar 3b is part of Swiss retirement provision. It includes voluntary private pension provision and enables insured persons to save money for retirement provision in addition to pillar 3a. Various forms of investment can be used in pillar 3b, such as bank accounts, securities or life insurance. Our advisors will be happy to help you find the right solution for you.
Yes, under certain conditions, the payment of your capital from pillar 3b remains tax-free.
When is pillar 3b tax-free?
For pillar 3b to be tax-free, the following conditions must be met:
- A contract term of at least five years
- A payout will only be made after the age of 60
- You were less than 66 years of age when you entered into the contract
If you use pillar 3b for your private retirement provision, you can also enjoy tax benefits by making higher deposits.
Unfortunately, it is not possible to convert pillar 3b to pillar 3a directly. Pillar 3a is a form of tied pension provision and benefits from tax advantages, while pillar 3b is more flexible and only offers a tax advantage when paid out.
Anyone can pay into pillar 3b. You are also free to choose the amount of your deposits. There is no maximum amount.
