Planning of private provision

The Swiss pension system is based on three pillars: AVH, pension fund, pillar 3a (and b).

While the first pillar, AHV, is based on the idea of social redistribution, the second and third pillars are for personal retirement savings. Tax deductibility for savings and tax privileges for pay-outs ensure the economic incentive structure.

Especially for employees and entrepreneurs over 50 years of age, detailed tax planning is worthwhile due to the special tax treatment of pension assets.

While employees with an income above the entry threshold are compulsorily affiliated to the second pillar - pension fund, self-employed persons can do without a pension fund affiliation and, in addition to the first pillar, make provision exclusively through the third pillar.  

While an employee can pay a maximum of CHF 6,768 (in 2017) annually into the third pillar with tax privileges, self-employed persons who do not belong to a pension fund can pay 20% of their annual earned income, up to a maximum of CHF 33,840. A voluntary affiliation to the second pillar is also possible for a self-employed person.

During the period of employment, especially the purchase into the pension fund has the potential for tax optimisation, as the purchase amount can be deducted from taxable income. Any withdrawals before and after a purchase must be taken into account - tax pitfalls are likely.

As the retirement age approaches, the advantages and disadvantages of a pension or lump-sum withdrawal (possibly a mixture of both) combined with a possible partial retirement must be discussed in more detail. While a future pension must be taxed as income, the capital withdrawal is subjected to privileged taxation. Comprehensive financial planning, combined with tax considerations, is indispensable in this context.

Nähert sich das Pensionsalter, sind die Vor- und Nachteile einer Rente oder eines Kapitalbezugs (gegebenenfalls eine Mischung von beiden) verbunden mit einer allfälligen Teilpensionierung genauer zu erörtern. Während eine zukünftige Rente als Einkommen versteuert werden muss, wird der Kapitalbezug privilegiert besteuert. Eine umfassende Finanzplanung, verbunden mit steuerlichen Überlegungen, ist dabei unabdingbar.

Further information

Mark Rüfenacht is available to answer your questions at 032 613 20 30 or mark.ruefenacht(at)