I've just been reading this thread, hope no-ones offended at it being ressurected. Given what seems to be the lousy rates mentioned in the thread and the tax on withdrawl at the end, and the fees for the scheme is there actually any point in doing this?

I just got a letter from my bank (UBS) that the were reducing the flat fee on their Vitainvest fund from 1.64% to 1.5%, I guess I should have been paying closer attention when I paid into the pillar three but that seems like a helluva lot to me<, enough to wipe out any benefit of having the account? What sort of fees are people paying for the pillar 3?

The 2% or so rates mentioned in the thread are for cash deposits, not stock market invested funds. There aren't usually any charges for cash accounts.

As to the point of doing it, that'll vary, but for us it's a combination of the large tax refund now versus the much smaller tax due on withdrawal, plus not needing that money now but will probably be very thankful for it later (this stops us frittering it away on pointlessness...).

Thanks for the reply Goldtop

Hello everyone! I have 2 questions:

1) Is there an online source of the declaration which I have to fill in when in order to claim the money back?

2) I currently reside in Basel, but I will soon move to canton Aargau. Where should I submit the tax declaration related to my 3rd pillar payments?

Hi!

Not sure if my question has been raised before, was not able to find anything with the search function. After 5 years in CH, I might relocate to another EU country soon. I have been contributing to my USB 3th pillar during these 5 years. Before I leave, I want to to contribute the maximum amount for 2010 for tax planning reasons. Since I am leaving the country in August or September I was wondering if I will be able to claim full tax deduction for the 3a contribution or is this a "pro rata temporis" deduction. In other words, if I live here 8 months in 2010 do I get to deduct only 8/12 of the max 3 pillar amount or the full amount? Anyone experience with this?

The tax office may refuse your deduction entirely. They might assess this as "Steuerumgehung" (tax avoidance), because your contribution was not intended as provident saving but tax minimization.

In any case, you will be taxed on withdrawing the 3a.

Suggest you ask the tax office directly before you contribute.

Thats an interesting thought, cause I payed into the account in January, did not wait until the end of the year... and may, just may leave before the tax year end....

If there is a sufficient gap between 3a contribution and departing, then the tax officer may view the contribution as genuine and accept the deduction.

Objections may be raised if contributions are made after the taxpayer knows that departure is imminent.

Hi I am looking at starting a new Pillar 3a Account. I am self employed and want to invest in the hybrid (Fixed income + Stocks). Any recomandations, though I already got a quote, I wanted to compare. Also what about postfinance?

If you pay me a hefty fee I'll provide recommendations as if it was me investing and tell you why

The goal of the thread is not to advise rather inform. You makes the choices and no-one here is liable.

If you want comparisons in english go to comparis.ch they do both cash and investment based comparisons. Bear in mind as in earlier posts, most funds are still showing a loss over the last few years, hence the attractiveness of straight cash interest even if rates have also dropped.

Richard and Goldtop (and everyone who asked/contributed):
AWESOME, AWESOME thread!!! Indeed, a treasure chest, as someone said before!



Reading through the pages, few questions pop up, in view of my soon to buy-back years from 2nd pillar


Could you please confirm or slap me for being stupid believing that:



3a payments are capped per year but only for tax purposes; there is no limit how much you put in 3a account. Once this is in there (over the taxable limit), it is not subject to taxation until I decide to withdraw it (TRUE/FALSE)


The gap in 2nd can be filled in at any time this year, or 5 years from now. This is not so with 3a, so when given a chance, one should be smart to put all money in 3a and only if remaining is available, put in 2nd pillar.



Somewhere back in the thread Goldtop mentioned something like “this is why it is no good to have insurance element to your 3a/3b” – I will soon get an offer from my bank on a combined life insurance/3eme pillier, which (supposedly) should allow for more savings and lesser tax. What is the catch here and is there a general rule of thumb with the insurance instruments in 3rd pillar?

Any advice and pointers much appreciated!

For my file and maybe for others 2010 Limits according

https://www.credit-suisse.com/ch/pri...ervorteile.jsp

With pension fund: 6566 CHF
20% of net earned income, up to a maximum of CHF 32,832 for those without 2nd pillar employee benefits

Pillar 3a looks like a good deal. Having read around this a bit, I couldn't find the answer to this question:

Suppose I opened a 3a this year and put CHF 6566 into it, then the whole CHF 6566 is effectively removed from my taxable income for the 2010 tax year.

The 2011 limit is CHF 6682. To get full tax relief in 2011, do I need to contribute an additional CHF 6682, or just CHF 116 in 2011?

If I only have to bung in the extra CHF 116, and I expect to be around for the nest 5 years, it looks like a good deal. If your effective tax rate is 20%, it pays for itself in 5 years. That is a good ROI.

It's calculated per year so you'd have to add CHF 6682 in 2011, if you want that amount of tax relief (in 2011).

The idea is to encourage people to build up savings it isn't a magical system to dodge taxes.

Yes, the tax relief is on the sum you stash away in that tax year, not on the total balance in the account from previous years.

BTW, you can open more than one 3a account and pay into both, as long as the total does not exceed the annual limit. That apparently gives more flexibility with withdrawal of funds should you want to use the money for house purchases, setting up a business, etc.

this is not true. you can deposit the maximum into as many accounts as you like (e.g. 6566 * 10!). but you will only receive the tax relief for one account per year.

Interesting - that's not what UBS told us, nor what Deloittes have put on our tax submission. Both accounts (half in each account) were definitely included, and both companies seemed sure that the entire sum was tax deductable.

I don't know the definitive answer yet, as obviously we're still waiting for Vaud tax authorities to come back with their response to our 2008 tax return. I'll try and remember to pop back and add the answer to the thread when I finally hear.

That is correct up to the maximum. but you could have paid the maximum into each account and only declared one of them.

these 3a accounts will only accept the annual maximum defined by government. 2010: 6566; 2011 6682;

I have several 3a accounts (at retirement it will be in your interest to have more than one so you spread the tax burden of long thee accounts over several years) I pay the maximum straight into one of these accounts at the beginning of the year. then I calculate what difference will be in the compounded rate over the years I have been paying in for, at the current amount at the end of that year.

e.g. 2011: 6682 compounded for 5years at 2.5% ~35,125CHF

But for the last 5 years the maximum has been smaller so you will not achieve the maximum above of this year.

so in the second account if I have the savings I deposit the difference in there. I don't get any tax break for it, but I do get the savings compounded at 2.5 %

Oh I see, I misunderstood, but now I get you.

Although it's the first I've heard of it, very interesting - no-one's ever said that we could pay n x 6,566 CHFs and just declare one account. The letter I got just this week from UBS as a 'don't forget to pay into your pension prompt' says:

"We would like to take this opportunity to remind you that you can make the following maximum payments into pillar 3a in 2010:

- 6,566 CHFs for employed persons with an occupational pension fund or
- 20% of employment income (up to 32,832 CHFs) for employed persons without an occupational fund"

And then a load of stuff about tax benefits, but nothing at all about making as many payments as you want but only claiming one sum of 6,566 against tax. They know we have two accounts, obviously - they recommended that much for the reasons you suggest - and have sent us two copies of this letter with attached orange slips, but were keen at the set-up to make sure that we understood that the total could be divided across the accounts each year but never exceeded.

But clearly you've been stashing away multiple annual 6,566es into multiple accounts (is this all with the same provider, by the way - just wondering if it's spread across providers and they just don't realise you're paying into more than one..?). Hmmm... anyone else doing this too?

__________________
'Chance favours only the prepared mind.'

(c; no, not a huge amount. haven't a high enough salary and i'm jut balancing the books. at some point it would become a tax liability if a lot of y salary was disappearing I have a couple of accounts with Postfinance, but these are actually managed by UBS. So the state 100,000CHF protection per client per institution applies there. (note all other savings in the Post are Federally protected) So when I hit 100kCHF I'll look to another institution. you should also notice that some institutions have better rates than others. you have to balance the better rates with the risk of 'losing' your money >100kCHF should they go under.