It will soon be possible to make up gaps in Pillar 3a contributions through subsequent purchases. This measure is aimed at people who, in certain years, have not been able to make any payments into their Pillar 3a or have only been able to make partial payments. In November 2023, the Federal Council launched a consultation on a corresponding amendment to the Ordinance on Tax Deductions for Contributions to Recognized Pension Plans (BVV 3). This consultation will run until March 6, 2024.
Contribution gaps arising after the new provisions come into force can now be filled by subsequent purchases. In this way, people who have been unable to make certain Pillar 3a contributions, or who have only been able to make partial contributions, will be able to make up their contribution shortfalls for the previous ten years through subsequent tax-deductible purchases.
This measure is designed to strengthen individual Pillar 3a pension provision.
Annual Pillar 3a purchases equivalent to the “small contribution” (i.e. CHF 7,056 in 2023) are permitted in addition to the regular contribution. The purchase limit also applies to people who are not insured under the second pillar.
To be able to make a purchase, you must be authorized to make Pillar 3a contributions, i.e. have an income subject to AHV in Switzerland and have paid the full ordinary annual contribution for the year of purchase.
The purchase amount is fully tax-deductible, in the same way as ordinary annual contributions.
Purchases into tied individual pension plans are made according to the following principle
self-declaration. The new regulations are designed to guarantee the legality of buybacks.
In addition, institutions will be required to provide a certificate enabling subsequent monitoring of redemptions and, in particular, a compliance check by the relevant tax authorities.
The ability to pay into a Pillar 3a account amounts in excess of the maximum deductible in order to catch up on payments for past years mainly benefits households with an annual taxable income of over CHF 100,000. According to the Federal Direct Tax Statistics 2019, around 10% of taxpayers are able to benefit from the maximum tax deduction in individual pension provision.
This publication contains general information and is not a substitute for detailed research or expert advice.
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