If you live in the cantons of either Fribourg or Geneva, you can also deduct your 3b (though not as much as a 3a). 3bs give higher returns.

If you're independent (self-employed) you can deduct 30 odd thousand p.a.

For 3a's, some offer guaranteed rates, others don't.

You have to shop around!

If you actually re-read the Credit Suisse website, you'll see that you earn 7.5% AFTER 5 years which works out at 1.5% p.a. and NOT 7.5% p.a.!!!!

I work with Credit Suisse and a few people have asked me this as 7.5% for a 3a is huge! However, as always, you need to read the small print

There is a slight difference here. The CS product is based on a 5 year term, whereas the Winterthur product is based on a till 65 term. ie until you retire. Thus comparisons are hard to make. What is interesting is that there is a minimum 1.5% return required on pension prodcuts and this product of CS's seems to be a tracker fund. ie directly linked to changes in the SMI. Given that the SMI over 5 years is likely to rise and that changes are based on half the increase (more or less) then it seems pretty reasonable but not outstanding. As far as I recall Winterthur has a similar structure but I also recall they are guaranteeing to give you back what you put in and are paying the real movement in the stock exchange limited by the pension requirements.

Pension requirements restrict funds to owning a maximum 50% of the fund value in equities. Given that as the equities rise in value they need to sell them this is a difficult thing to manage and it does cause limitations in earnings. So ignoring the Winterthur version, over 5 years with CS you are risking .09% of interest against a standard fund for a reasonable expectation to gain 4.4% ie 12% payout.

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1.5% is not really a lot.

You can do much better with other products that are guaranteed too...

That's interesting, since CS' annual return actually comes out below 1.5.

Hello Richard

Thank you very much for your useful post. I was recently advised to join a 3rd Pillar Pension Fund using a bank as opposed to an insurance company. Reasons being more transparent and flexibility.

I enquired at your favourite bank (Raiffeisen) and it seemed OK. I emptied my pensionkasse on buying a house and this leaves me obviously in the situation where i can take full advantage of a 3rd Pillar Pension Fund.

What do you class as being the major pros and cons between banks and insurance companies?

Could you send me some info on the Winterthur option.

Many thanks in advance!

Ian

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British politician (1874 - 1965)

Hi Suermel,

Can you explain the wohnsparen please ? how do you get to do this tax deduction ?

rgds,
Cobenz

The law restricting investment risk applies to all policies and this restricts investment in equities to 50% of the fund value.
Banks provide you almost always with straight investment and maybe a little insurance cover. Insurance companies provide you investment with insurance. The insurance might be a small life policy part or it might be some kind of investment loss cover, but there will always be an insurance element. End effect is that not 100% of the premiums are paid into an insurance policy whereas with a bank they are. Hence often the returns from a bank are potentially higher but provide little cover within the policy.
For the winterthur option I only have it physically and in German... They normally (typical insurance company) want to talk to you about it... On their website you can find information but it always says for further information contact an advisor...

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The only good is knowledge and the only evil is ignorance.

Hello!

I guess you may know already but... once you use your second pillar to buy a house, you can "fill it up" again in the years later. details arein your pension plan rules. This has the benefit to have a full pension plan. It is also tax deductible and you can put in whatever amount (no limits like with the third pillar.

I f I were you, I would first reconsruct your pension plan and then go to third pillar.

Cheers,
Cristina

Two points here. There are limits on the amount you can repay into a depleted pension fund and the third pillar should be filled first as the right to fill this occurs only during the calendar year whereas the right to fill your second pillar carries over to future years. The limit on the amount you can repay into a depleted pension fund is dependent on your income. It is not possible to make a tax return with a negative taxable income, indeed the tax office will disallow deductions into the pension fund if the amount paid in is deemed by them to be unreasonable. For this reason if the amount you intend to repay is large in comparison to your taxable income you must gain approval from the local tax office.

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The only good is knowledge and the only evil is ignorance.

Isn't it that with the insurance option you have to pay in every year (and if you want to stop it you had to do a buy-out?) whereas with the banking option you can decide every year whether you pay in or not? I think it depends on your personal situation whether you go for the insurance option with protection (ie you have dependants, a steady job etc) or the banking option.

Does anyone know if it is possible to transfer a UK pension into a Swiss pension scheme?

There´s been some other threads addressing this. I also have a contracted-out pension fund which I wanted to move over, but there is a bit of red tape in so far that certain documents need to be translated for the recipient fund, certification of being a recognised pension body etc. In the end, and since the UK private pension fund reforms over the last few years, I decided that I will leave alone as fund is performing well, and all shortfalls have been eliminated meaning very little risk.

Use the search function, it´s there somewhere.

The Bank Brienz Oberhasli is offering 3.0% on a 3A account. This is 0.75% more than current Migrosbank & Coop rates.

On a non fund-linked 3A, are total contributions paid-in safeguarded by law? For 3%, it would make sense to move all my contributions to date over, but are there some risks involved in dealing with a less well known bank?

I just started working for a company in Zug on January 3rd. Can I enroll in a pillar 3a for 2008 and still get the tax benefits or do I have to wait until the end of 2008 to enroll for 2009?

thanks

Hi,

a slightly different question about claiming back taxes on 3rd pillar for people taxed at source (like me) - I have searched through the various threads but could not find the answer.

I am trying to understand what is the optimal way to pay in the 3rd pillar to save taxes. Quellesteuer are withheld monthly and are calculated on the monthly taxable income (differently from people filing a tax declaration which pay on their yearly income). This system is particularly disadvantageous for people which do not have a regular income flow throughout the year. In particular lump sum paid once a year (e.g. bonus) is heavily taxed - the quellessteuer tax rate for that month will be much higher than in other months.

Now, I was wondering, are also the taxes claimed back on the third pillar calculated on a monthly basis for people taxed at source? If this is so, it is probably much better to pay the max amount (the 6600 chf) on the month when the bonus is paid in order to offset the higher taxable income and lower the rate.

If it not so, does anyone know how the amount of claimed back taxes is calculated?

Thanks a lot.

Alvise

The contributions can be claimed back via a tax return.
They are not factored in monthly.

Now, if you earn over CHF 120K you'll get a tax return automatically and it all comes out in the wash.
If you earn less, there is a tax return "light". I'd consult a tax advisor (or wait until Richard corrects me ): you may be able to fill in a full tax return.

Note the 120K is "family" income. So if you and the missus earn, it is combined income. Then of course you have 2 x pillar 3a deductions.

Technically it is not a tax return but a request to correct the tax at source at the end of the year, a sort of claim back. You do this with a simple forma and not a tax declaration.

http://www.steueramt.zh.ch/html/form...ntrag-e01r.pdf

Unless you earn more than 120000 CHF in which case you do only the tax declaration.

regards,
Cristina

Thanks. That must be what I've heard about.

Alvis, if you only work part of the year, it is useful asking to fill in a full tax form, as you will be able to use extra deductions, AND spread out your quellensteuer over the 12 months.

However, you then have to fill in a form every year as long as you stay in Switzerland (says Richard).

some of the extra deductions you can claim:

• travel to work under certain conditions
• or: a bike (700 CHF deduction)
• lunch
• some types of educational expenses
• pillar 3a (but you can use the lite form too)
• medical expenses if over 4 % of your net income (including monthly premiums perhaps; this is unclear to me)

So if you only worked part of the year, paying in the maximum of 6350 or so CHF a year is very beneficial. You can calculate how much tax roughly you will get back (go to UBS and search for calculators).

Yes you can reclaim the tax even if you are taxed at source, eg those in their first five years of B permit status.

You need to write to the relevant tax authority by end of March each year and enclose your attestation of contribution for the previous tax year.

The basic rule for this allowance is use it or lose it.