Executive Summary
Pillar 3a (Restricted)
Tax-Deductible: Yes (up to CHF 7,258).
Access: Locked until retirement (mostly).
Verdict: Always max this out first.
Pillar 3b (Free)
Tax-Deductible: Generally No (except Geneva/Fribourg).
Access: Liquid & Flexible.
Verdict: Wealth building after 3a is full.
Deep Dive: Pillar 3a (The Tax Sword)
Think of Pillar 3a as a deal with the government: You lock your money away, and they give you a massive tax break.
- Rule: 100% deductible from taxable income.
- Limit (2025): CHF 7,258 for employees (with pension fund). CHF 36,288 for self-employed (without pension fund).
- Withdrawal: Highly restricted. You can only touch it for: Buying a Home, Leaving Switzerland permanently, or becoming Self-Employed.
Pro Tip: Always max this out first. The immediate return on investment (via tax savings) is unbeatable—often 20-35% instantly.
Deep Dive: Pillar 3b (The Freedom Fund)
Pillar 3b is simply "everything else." It is your private savings, life insurance, stocks, or cash.
- Rule: Totally flexible. It has no legal ceiling.
- Access: You can withdraw it tomorrow (unless you signed an insurance contract).
The Geneva & Fribourg Exception (Insider Knowledge)
This is where generic advice fails. In most cantons (Zurich, Zug, Vaud), Pillar 3b premiums are not tax-deductible.
However:
The Tax Loophole
Geneva:Deduction of CHF 2,200 (Single) / CHF 3,300 (Married) plus CHF 900 per child.
Fribourg: Deduction of CHF 750 (Single) / CHF 1,500 (Married).
Insight: If you live in Geneva, a 3b Insurance policy is a powerful tax tool. Elsewhere, it is just a savings plan.
Warning for American Expats
CRITICAL WARNING
Pillar 3b Insurance products often contain mixed investment funds. The IRS may classify these as PFICs (Passive Foreign Investment Companies). This leads to punitive taxation that often exceeds the gains.
Americans should generally stick to 3b Bank Solutions (Cash/Bonds) or individual stock portfolios.
US Person? Get a compliant provider list →The Bank vs. Insurance Decision Matrix
Should you open 3b with a Bank or an Insurance company? Use this table.
| Feature | 3b Bank Solution | 3b Insurance Solution |
|---|---|---|
| Flexibility | High (Withdraw anytime) | Low (Contractual lock-in) |
| Obligation | Voluntary deposits | Mandatory premiums |
| Coverage | None (Savings only) | Yes (Death & Disability) |
| Risk | Market Risk | Surrender Value Risk* |
*Surrender Value Risk: If you cancel an insurance policy in the first 3-5 years, you often lose 50-100% of the money you paid in. Only sign this if you are staying long-term.
Expert Recommendation
Scenario A: Wealth Accumulator
"I want maximum tax savings and flexibility."
Strategy: Start with 3a Bank (VIAC/Finpension). Avoid 3b Insurance unless you have a specific tax reason (Geneva) or need death coverage.
Scenario B: Geneva Resident / Family Protector
"I live in Geneva and want to protect my family."
Strategy: A 3b Insurance Policy makes sense here. It provides tax deductions (Geneva only) and ensures your family is paid if something happens to you.
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Upload Offer for ReviewFrequently Asked Questions
Is the 3b payout taxable?
Generally No. If you hold a 3b Insurance policy for a certain duration and meet specific conditions (e.g., hold until age 60, pay for 5 years), the final payout is tax-free. Bank 3b withdrawals are capital, so no income tax (but wealth tax applies annually).
Can I name anyone as a beneficiary?
Yes. Pillar 3b allows "Beneficiary Privilege," meaning you can bypass legal heirs to some extent. This is much more flexible than Pillar 3a, which has a strict legal hierarchy (Spouse - Children - Parents, etc.).