The Federal Council approved, as of January 1, 2025the possibility for Swiss policyholders to buy back unpaid contributions in their home country. 3rd pillar A.
This reform responds to the growing demand for flexibility in the management of the individual benefits and offers policyholders an opportunity to improve their tax situation. The first buy-backs will be possible from 2026 for contributions not made by 2025.
Conditions for making a Pillar 3a purchase
To make a purchase under Pillar 3a, a number of conditions must be met:
- The insured must have contributed to Pillar 3a in the year for which you wish to purchase contributions, and also in the year of purchase.
- He must have received a income subject to AHV in Switzerland during the buyback year and the buyback year.
- In the year of the buyback, the insured must have paid the full ordinary contribution (7258 francs for 2025 and 2026).
Tax benefits of Pillar 3a purchases
Income tax deduction
At present, it is already possible to deduct contributions to the 3rd from taxable income up to a maximum of CHF 7,258 in 2025, and CHF 7,056 in 2024. Amounts paid into Pillar 3a in the form of repurchases are also fully deductible of taxable income, enabling policyholders to significantly reduce their annual tax burden.
It is now possible to buy back up to 7,258 CHF (for 2025 and 2026). This option is added to standard annual contributions.
Advantageous taxation
What's more, funds accumulated in Pillar 3a are not subject to income tax and wealth as long as they remain in the account. When the funds are withdrawn, either on retirement or as part of an authorized early withdrawal, the lump-sum benefits are taxed separately at a reduced rate.
Benefits of Pillar 3a
Tax-free capital accumulation
In addition to the deductibility of amounts paid as buybacks, pillar 3a offers a double tax advantage through its accumulation mechanism without taxation, allowing taxpayers to save efficiently, as the interest generated by the funds in the account is not subject to income tax or wealth tax as long as the money remains in pillar 3a.
Breakdown of withdrawals
The flexibility offered by Pillar 3a allows taxpayers to distribute withdrawals over several years and/or several accounts 3a to further optimize taxation. This approach limits the overall tax impact by avoiding higher tax thresholds for large capital withdrawals.
However, it is important to plan withdrawals carefully to avoid unexpected tax implications, including compliance with the three years if surrenders have been made. This period prevents the withdrawal of funds in the form of capital in the three years following a surrender, on pain of losing the tax deductibility of these amounts.
