How do pillar 3a and pillar 3b differ?
Pillars 3a and 3b differ primarily in terms of the taxation and level of freedom that they offer.
Pillar 3a is also known as restricted pension provision. It can only be withdrawn in certain cases (residential property, self-employment, migration, a pension fund purchase, full disability and in the event of death) or shortly before retirement age, but in return it offers tax benefits. Employees can pay a maximum of CHF 7,056 annually into pillar 3a; for self-employed people the amount is CHF 35,280 (or a maximum of 20% of net income).
Pillar 3b, unrestricted retirement provision, is considerably more flexible. There is no maximum amount, benefits can be drawn at any time and beneficiaries in the event of death can be chosen at will. In return, pillar 3b only offers tax benefits in special situations.
For the accumulation of personal retirement provision, pillar 3a is generally the better choice due to the tax benefits. Pillar 3b is of interest for insured persons with high income who want to achieve certain savings targets or to secure particularly good cover for themselves and their families.