Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 26.11.2007, 17:18
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
3rd Pillar Pension Fund

Okay, you might think this does not belong here but it does!

I just want to remind all those who might never have heard of this that if you have not yet done so, you need to register for a 3rd pillar pension fund now if you want contributions for year 2007 to be tax deductable.

I will also stick my neck right out and say that at the moment the best policy is with Winterthur... They are the only company out there at the moment giving a guaranteed return and if you are thinking of staying for a while that gives added security.

And if I put this in finance, banking and the like half of you won't read it hence the reminder here in daily life...

If you have not got a clue what I am talking about it might be a good idea to say so...
Reply With Quote
The following 6 users would like to thank Richard for this useful post:
  #2  
Old 26.11.2007, 17:29
Cat's Avatar
Cat Cat is offline
Senior Member
 
Join Date: Jan 2007
Location: Zurich
Posts: 263
Groaned at 0 Times in 0 Posts
Thanked 18 Times in 15 Posts
Cat is considered knowledgeableCat is considered knowledgeableCat is considered knowledgeable
Re: 3rd Pillar Pension Fund

Thanks Richard for this useful post!

I was only thinking of setting one of these funds up this week. Would you be good enough to explain some brief details about this pension, like is there a minimum/maximum you can contribute? Also how is this effected if you leave Switzerland? (not planning to at present but you never know!)

Many thanks and yes you are quite right I only read it because it was in 'Daily Life'

Regards Catherine
Reply With Quote
  #3  
Old 26.11.2007, 17:45
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: 3rd Pillar Pension Fund

Quote:
View Post
Thanks Richard for this useful post!

I was only thinking of setting one of these funds up this week. Would you be good enough to explain some brief details about this pension, like is there a minimum/maximum you can contribute? Also how is this effected if you leave Switzerland? (not planning to at present but you never know!)

Many thanks and yes you are quite right I only read it because it was in 'Daily Life'

Regards Catherine
Yes there is a maximum and it is 6365 for year 2007. Minimum isn't given but most say 1K. If you leave Switzerland you can cash it in as you can periodically when there is "enough" in the pot. This is more tax efficient than leaving it long term till the pot is 200K or so. You don't pay tax on the contributions nor on the interest but you do on the withdrawals.
3rd pillar is more or less the Swiss equivalent to AVCs Additional Voluntary Contributions. It sits in a totally private pot (or pots you can change each year if you want) and the annual max contribution is published for the year - usually increasing annually.
Reply With Quote
This user would like to thank Richard for this useful post:
  #4  
Old 26.11.2007, 22:34
NatsBrit's Avatar
Forum Veteran
 
Join Date: Apr 2007
Location: Lausanne / Weybridge UK
Posts: 502
Groaned at 10 Times in 5 Posts
Thanked 241 Times in 166 Posts
NatsBrit is considered knowledgeableNatsBrit is considered knowledgeableNatsBrit is considered knowledgeable
Re: 3rd Pillar Pension Fund

Hi Richard

Thanks for these posts. I'm not very financially savy so could I ask you for some basic info on these.

Besides the benefit of the long term pension benefit, could you please help me to understand how these policies help with taxes.

If we invest the CHF 6365, is the benefit that our fortune is reduced by this amount and therefore we are not taxed on it or is there an additional benefit that I do not understand?

Sorry if my question is very basic but as I mentioned, I'm definitely not financially savy

Thanks
Nats
__________________
-----------------------------
"The more sure I am that I'm right, the more likely I will actually be mistaken. My need to be right makes it more likely that I will be wrong. Likewise, the more sure I am that I am mistreated, the more likely I am to miss ways that I am mistreating others."
Reply With Quote
  #5  
Old 26.11.2007, 22:56
miniMia's Avatar
Forum Legend
 
Join Date: Apr 2007
Location: romandie
Posts: 9,997
Groaned at 101 Times in 92 Posts
Thanked 9,071 Times in 4,509 Posts
miniMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond reputeminiMia has a reputation beyond repute
Re: 3rd Pillar Pension Fund

Hi Richard, thanks for the reminder.
does this have to be paid by the end of November? or 31 December?
Reply With Quote
  #6  
Old 26.11.2007, 23:25
jaudi's Avatar
Forum Veteran
 
Join Date: Sep 2007
Location: zurich
Posts: 529
Groaned at 4 Times in 4 Posts
Thanked 452 Times in 212 Posts
jaudi has an excellent reputationjaudi has an excellent reputationjaudi has an excellent reputationjaudi has an excellent reputation
Re: 3rd Pillar Pension Fund

It's not your 'fortune' that's reduced by this amount, but your income. If you fill a tax return (foreigners earning >120,000 or home owners or C-permits) you can deduct the amount you pay into 3rd pillar from your taxable salary before you calculate your tax. For those not in such a position, I'm not sure if you can 'claim back' against tax.

Deadline will depend a little on whose 3rd pillar product you buy, but typically sometime around mid-Dec, to allow them to process etc.

Also for those paying additional into BVG (2nd pillar), the November deadline sometimes mentioned is also flexible according to your pension co. (mine says Dec 20th).
Reply With Quote
This user would like to thank jaudi for this useful post:
  #7  
Old 27.11.2007, 11:08
kri's Avatar
kri kri is offline
Forum Veteran
 
Join Date: Nov 2007
Location: Currently not in Switzerland
Posts: 1,172
Groaned at 11 Times in 11 Posts
Thanked 782 Times in 434 Posts
kri has a reputation beyond reputekri has a reputation beyond reputekri has a reputation beyond reputekri has a reputation beyond repute
Re: 3rd Pillar Pension Fund CLARIFICATIONS

A few clarifications :-)

1) You can have a 3rd pillar account with either a Bank or an insurance company. In a bank it works pretty much like a standard account but with higher interest rates. You can have different types according yo your risk profile. Coop and Migros Bank were the best ones for just a basic account last time I checked. You do not need to have other accounts with them.

2) You can deduct the amount you put into your 3rd pillar from your taxable income whether you are a tax declarer or a tax at source person. Just the way to do it is different: a tax declarer willinclude this in his/her declaration whilst a tax at source needs to fill in the approriate form.
http://www.steueramt.zh.ch/html/form...ntrag-e01r.pdf

3) You will pay some tax upon withdrawing this amount (this is to avoid tax evasion) The amount depends on Canton etc but it is still lower than income tax

4) You can withdraw the amount if you are buying a houise, setting up a business or leaving the country

5) There is no minimum amount you will pay each year. the maximum amoutn is 6365 for year 2007 if you belong to a second pillar (your company pension fund) If not, the max amoutn is around 30 K.

Cheers,
Cristina
Reply With Quote
  #8  
Old 27.11.2007, 11:15
Polorise's Avatar
Forum Legend
 
Join Date: Mar 2007
Location: about there
Posts: 2,738
Groaned at 26 Times in 26 Posts
Thanked 2,325 Times in 1,259 Posts
Polorise has a reputation beyond reputePolorise has a reputation beyond reputePolorise has a reputation beyond reputePolorise has a reputation beyond reputePolorise has a reputation beyond repute
Re: 3rd Pillar Pension Fund CLARIFICATIONS

Quote:
View Post
A few clarifications :-)


5) There is no minimum amount you will pay each year. the maximum amoutn is 6365 for year 2007 if you belong to a second pillar (your company pension fund) If not, the max amoutn is around 30 K.
Kri, this is personally very interesting ... can you point me in the right direction, as this is not something I have heard of before. Would this be possible for someone self employed ?

thx
Reply With Quote
  #9  
Old 27.11.2007, 11:27
kri's Avatar
kri kri is offline
Forum Veteran
 
Join Date: Nov 2007
Location: Currently not in Switzerland
Posts: 1,172
Groaned at 11 Times in 11 Posts
Thanked 782 Times in 434 Posts
kri has a reputation beyond reputekri has a reputation beyond reputekri has a reputation beyond reputekri has a reputation beyond repute
Re: 3rd Pillar Pension Fund

Hello!

Yes, this is exactly fo rpeople who are self employed and therefore do not have a second pillar. In this case, you can invest 20% of your income with a max of around 30 K.

http://www.ubs.com/1/e/ubs_ch/privat...a/savings.html

(I pasted this becausein english. would encourage you to compare interest rates as some other smaller bansk are better than UBS)

Cheers,
Cristina
Reply With Quote
This user would like to thank kri for this useful post:
  #10  
Old 27.11.2007, 11:22
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: 3rd Pillar Pension Fund CLARIFICATIONS

Quote:
View Post

5) There is no minimum amount you will pay each year. the maximum amoutn is 6365 for year 2007 if you belong to a second pillar (your company pension fund) If not, the max amoutn is around 30 K.

Cheers,
Cristina
Actually if you are self employed the limit is 31824 or 20% of your turnover whichever is the lower...
Reply With Quote
This user would like to thank Richard for this useful post:
  #11  
Old 02.11.2009, 02:35
Newbie
 
Join Date: Nov 2009
Location: zh
Posts: 4
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
ahr davies has no particular reputation at present
Re: 3rd Pillar Pension Fund CLARIFICATIONS

Quote:
View Post
Actually if you are self employed the limit is 31824 or 20% of your turnover whichever is the lower...
Hello Richard,

I need to find out as much info as we can before my Swiss wife and 3 Swiss/Canadian children and myself, (Canadian mit Schweizer Buegerschaft), move to Zuerich.

We would like to buy a Mehrfamilienhaus and if possible use my Canadian Registered Retirement Savings Plan as part of the financing.

Can you comment?

All assistance greatfully appreciated

ahr davies
Reply With Quote
  #12  
Old 30.11.2007, 12:22
Ian Nicol's Avatar
Junior Member
 
Join Date: Feb 2007
Location: Higher Dukinfield. (Oberentfelden!)
Posts: 99
Groaned at 0 Times in 0 Posts
Thanked 22 Times in 15 Posts
Ian Nicol has earned some respectIan Nicol has earned some respect
Re: 3rd Pillar Pension Fund

Quote:
View Post
Okay, you might think this does not belong here but it does!

I just want to remind all those who might never have heard of this that if you have not yet done so, you need to register for a 3rd pillar pension fund now if you want contributions for year 2007 to be tax deductable.

I will also stick my neck right out and say that at the moment the best policy is with Winterthur... They are the only company out there at the moment giving a guaranteed return and if you are thinking of staying for a while that gives added security.

And if I put this in finance, banking and the like half of you won't read it hence the reminder here in daily life...


If you have not got a clue what I am talking about it might be a good idea to say so...

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
__________________
I like pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals. Sir Winston Churchill
British politician (1874 - 1965)
Reply With Quote
  #13  
Old 04.12.2007, 09:18
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: 3rd Pillar Pension Fund

Quote:
View Post
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
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...
Reply With Quote
  #14  
Old 04.12.2007, 09:48
kri's Avatar
kri kri is offline
Forum Veteran
 
Join Date: Nov 2007
Location: Currently not in Switzerland
Posts: 1,172
Groaned at 11 Times in 11 Posts
Thanked 782 Times in 434 Posts
kri has a reputation beyond reputekri has a reputation beyond reputekri has a reputation beyond reputekri has a reputation beyond repute
Re: 3rd Pillar Pension Fund

Quote:
View Post
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.
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
Reply With Quote
  #15  
Old 04.12.2007, 10:01
Forum Legend
 
Join Date: May 2005
Location: Luzern currently
Posts: 2,565
Groaned at 3 Times in 3 Posts
Thanked 720 Times in 373 Posts
Richard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond reputeRichard has a reputation beyond repute
Re: 3rd Pillar Pension Fund

Quote:
View Post
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.
Reply With Quote
  #16  
Old 09.12.2007, 17:43
Newbie
 
Join Date: Nov 2007
Location: near Zurich
Posts: 7
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
SwissBirdie has no particular reputation at present
Re: 3rd Pillar Pension Fund

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.
Reply With Quote
  #17  
Old 09.12.2007, 19:57
stuartq's Avatar
Member
 
Join Date: Oct 2007
Location: London/Vaud
Posts: 170
Groaned at 2 Times in 1 Post
Thanked 20 Times in 19 Posts
stuartq has no particular reputation at present
Re: 3rd Pillar Pension Fund

Does anyone know if it is possible to transfer a UK pension into a Swiss pension scheme?
Reply With Quote
  #18  
Old 25.02.2008, 22:47
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,857
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: 3rd Pillar Pension Fund

Quote:
View Post
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 are in 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.

Cristina
No longer possible to claim full tax deduction while refilling a pension plan depleted to buy housing! The taxman closed that loophole in 2007. Note that:
* Amounts withdrawn to finance housing is taxed, albeit at a lower rate, on withdrawal from the pension plan.
* Cannot put in "whatever amount" into the pension plan. Only the deficit to be fully vested.
Reply With Quote
  #19  
Old 13.01.2008, 13:47
Newbie 1st class
 
Join Date: Jun 2007
Location: Thalwil
Posts: 11
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
bjrock_99 has no particular reputation at present
Re: 3rd Pillar Pension Fund

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
Reply With Quote
  #20  
Old 13.01.2008, 15:43
Newbie
 
Join Date: Jan 2008
Location: Zurich
Posts: 1
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
alvis has no particular reputation at present
Re: 3rd Pillar Pension Fund

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
Reply With Quote
Reply

Tags
3rd pillar, dritte saeule, saving, sticky thread




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Pension Second Pillar contributions DaveA Finance/banking/taxation 51 06.01.2015 11:50
Money into Pension Fund & Tax Saving ? Ashish Finance/banking/taxation 17 20.11.2011 20:38
Pension - Moving my UK pension to Switzerland movingtozug Finance/banking/taxation 94 28.04.2010 12:47
Claiming pension from first pillar (AHV) TimberWolf Finance/banking/taxation 6 24.09.2009 14:17
Tax break on contribution to pillar 3a retirement pension ThomasSoerensen Finance/banking/taxation 6 07.10.2007 14:00


All times are GMT +2. The time now is 12:16.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0