Not until you retire or get the hell out of this country

You can move the money to any bank you wish. You may, as according your banks terms and condition, pay a fee for this.

Does anyone have any experience with a 3rd pillar account at Crédit Agricole Financements (CAF)?

I've had my mortgage with CAF for over 10 years and overall I'm happy enough with them. They have been quite competitive lately on savings accounts rates, but I wonder if it's just to attract new clients, and then they'll reduce rates and increase fees. This is my worry with the 3rd pillar, which at 0.7% is one of the highest rates in Switzerland. One can of course move the 3rd pillar account away to another bank, so it's not as if you're tied to them.

I suppose it''s pretty straight forward though, since the 3rd pillar is regulated under Swiss law. You get the interest rate that they publish each year, and can deduct the amount allowed per year (currently about Chf 7K). The prospectus didn't show any outgoing transfer fee, which is usually free, but I've heard of one of two banks charging fees.

Competitive at paying zero rates? That's called a Stockholm syndrome

Ahahaha

Seriously, 0,7% on savings is ridiculous.

Are there any other 3 pillar accounts (hopefully cheaper) based on ETFs except this one:

https://finanzportal.vermoegenszentr...execution=e2s1

Is it true that the money stored on the 3 pillar account is tax free (before you retire) even if it is invested in ETFs? Will it have any tax disadvantages if you have (or have had in the past) such a 3 pillar account or is it the same as a normal one?

VIAC is a much better deal than VZ: it's cheaper, allows you to go 100% stocks and imposes no silly currency hedging restrictions

Depends on stock and ETF domicile: Switzerland doesn't charge any tax but other countries may. CH stocks, obviously, and US stocks should have 0% tax for swiss pension institutions per US income tax treaty, but it'd need a right setup: CH stocks should be in a CH domiciled fund, US stocks in a US or CH domiciled fund, otherwise there's a risk US withholding tax will be charged somewhere along the way

Not if you're American!

Hi all!
We've been in CH for 3 years, got married this year and now wondering wether we need to set a pillar 3a. We went to a tax advisor in Geneva who recommended us Liechtenstein Life KOKON value 3a, which is with an insurance company. I took the simulation they did and am now researching and trying to understand the different products.

I've also checked the 3a from VIAC or banks and after checking multiple threads in this forum I'm more confused than I was in the beggining. If any nice soul has the time to answer my questions I'd be more than grateful:

- What are the main differences between pillar 3a products of banks and insurance companies? (Tax advisor said that insurance companies include life insurance/disability insurance vs. no life insurance in banks, but I guess there are more differences?)

- Are pillar 3a bank products by default more risky than those from insurance companies?

- Are pillar 3a products from insurance companies more expensive than the ones from banks?

- If I sign up for a pillar 3a, am I commited to contribute with the agreed amount (let's say, maximum of deductible about 550CHF per month) until my retirement? Or is this something that can be adjusted if my situation changes ? (Any of us loses their job or any emergency...)

Just in case it helps, we are a married couple, B permit, no kids, living in Geneva. I make 120K working 100% and hubby makes about 35K working part time. If we deducted the maximum for the 3a we could save about 3,900 CHF in taxes/yr so I think we have to think about this.

Sorry if I'm mixing basic up concepts in my post... I'm no financial expert.

Thanks a lot for any help

I think another key question is how long you plan to stay in CH.

Bear in mind your husband can only claim deduction prorata his work percentage. Is this reflected in that savings calculation.

Especially if you arent definitely here for the long haul, and considering the savings you are making taxwise anyway, I would stick to banking rather than insurance products. Probably even consider just a money market product (ie fixed interest), this will offer you the lowest risk and most flexible option for now.

If you want to go for something more sophisticated get some independent financial advice.

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Run away and fire your tax advisor too, he obviously doesn't seem to care about your best interests here, but only about money in his own pocket - typically, such kind of insurers would kick a thousand or two or so back, if he gets them your autograph on the contract.

I'm hesitating to call this an outright scam because there's apparantly such a thing as getting sued for defamation, i'm sure it's all legit on paper and not exactly a money blackhole, but let's just say strictly for investment purposes (but if you really really wanted a life insurance anyway, it's a different matter) such 3a insurances are far suboptimal to other types of investment products you can find elsewhere.

It's the best deal on the market at the moment, look no further. Expensive with 0.5+% TER, but everything else is even more expensive, this is a niche thing. Unless you're into old fashioned savings accounts and losing money to inflation, then you can just call your bank to open one for you, they're all more or less the same and typically charge no costs.

duh what do you think they are desperate to insure your life for free?? It's a risk and insuring risk costs money. take a guess who's gonna bear all these costs

yeah that's about it. the big question that your tax adviser "forgot" to ask: do you even need a life insurance? and the next one: is it competitive to other life insurance products on the market? do you even know much they're gonna charge you every year?

You can cancel by law after 3 years and get back what you paid, minus a generous deduction of course for all sorts of things, like the kickback to your tax advisor and insurance costs, that they probably don't tell you about.

That's impossible, even though GE is tax hell I believe its marginal tax rate still peaks at around 45%, so 3k savings tops. You don't have to sign up for any insurance to get these savings, pillar 3a at your bank will do the trick just as well without any of those ridiculous costs that insurance will pass onto you

I assume he means as a couple. Together they can deduct 13536 CHF, so if tax saving is 3900 CHF, that gives a marginal tax rate of 28.8%.

Thanks both for taking the time to reply.
I went to this advisor willing to have an independent opinion after so many cold calls offering different products but I realize that maybe such thing as an independent advisor does not exist?

We plan to stay in CH, we don't know how long but as far as I understand if we leave the country we will be able to bring our 3rd pilar money with us (paying taxes but less than source tax), so if this happens in 10 years I think it will have been worth it considering tax advantage.

My calculation is for the couple indeed. However it's true that for my husband I didn't take into consideration that he may not be able to deduct the maximum. He works with an long term contract hour-based, and approx at 70%. I'm not sure how the maximum deductible can be calculated, any clues?

Then thank you @ivank for opening my eyes on the lack of transparency of the fees of this insurer. Today I will check the documentation in detail but this was never clear during the interview.

I wonder how do people with not a deep knowledge on these topics do not get scammed... if any... happy Sunday!

They sell life insurance 3rd pillars to 18 year olds with no kids ... fishy at best.

If you have a long investment horizon (>12 years), you should definitely consider putting the money into an investment fund. VIAC is currently the cheapest and I moved my existing contributions from UBS to VIAC a couple weeks ago (down from 1.62% p/a to 0.52 p/a while increasing market participation from 75% to 100%). Stock markets historically outperform other asset classes and the interest you get on a plain 3a savings account is currently roughly 0.25%.

This is incorrect!

For your husband's deductible contribution, the percentage he works is not important (it is not pro-rata).

It depends on:

- does he contribute to a 2nd pillar BVG (occupational pension plan)?
...in which case he can pay in and deduct the regular full amount of CHF 6'768.

OR

- is he self-employed without BVG?
...in which case he can pay in and deduct 20% of annual earned income (up to a maximum of CHF 33'840).

https://www.ch.ch/en/3rd-pillar/

Dear Jot,

Thanks for the tip, my husband contributes to 2nd pillar, so I assume he can deduct as much as I can? Is there any official source to check this?
I've read the link but it doesn't mention it specifically I think.

For ViAC customers,
Can you contribute each year according to your situation or do you need to commit for a monthly payment from the beginning to the retirement age or to the time at which you decide to withdraw the money under the allowed scenarios?

Thanks all and happy Wednesday!

Art. 7 BVV 3 https://www.admin.ch/opc/de/classifi...278/index.html
Official enough?

This link I posted above is an official source (www.ch.ch: "A service of the Confederation, cantons and communes", "ch.ch is part of the e-government strategy of providing access to electronic government services"). This is the sentence you're looking for:
Plenty of banks also have the information in English on their websites too, e.g. here (UBS) and here (CS) or also here (Comparis).

You don't have to contribute like with Insurance 3a. So yes, you can contribute according to your situation, or not at all. But that's very common with bank third pillars and nothing VIAC specific.

Kind of a general question regarding this 3rd pillar thing. I've been putting money in but this year I've started to have doubts about it...

3rd pillar is good if your plans are to stay in CH. But what if I want to move to for instance Spain (or somewhere else) before I retire ?

My fear is that when I ask for the money be paid out (possible after 60) in a lump sum, it will count for that years income tax. The tax on it is likely to be much higher than the tax saved by putting it in 3rd pillar. So it would be better to just pay the (low) income tax now than (high other countries) income tax later.

Am I right with this train of though ?

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