hi everyone.
i had a few friends over, and the following conversation occured:
"what would happen if you had multiple 3a accounts with different banks/viac"
let us assume you are employed with a max limit 6800 per year.
i know you can only deduct once for taxes, but realistically what is stopping you from putting the money into different institutions?
common sense?
laws?
please express your thoughts

You can have multiple accounts but you cant add to multiple accounts in the same year (over the limit), and certainly not deduct the tax.

(So, if you cant deduct the tax, why would anyone want to add more?)

Are you talking about having more than one account but only paying in the limit in total? In that case I can't see why there would be a problem.

If you go over the limit I guess bad things happen when you do the tax return.

Over time it is recommended to have multiple accounts because you can only do a full withdrawal, multiple accounts gives you tranches you can take out.

It also makes sense to diversify the risk a bit among providers over time.

Personally I wouldn't do more than one at a time (i.e. actively paying in), the annual amount isn't worth the bother. But I do have multiple accounts, and I would use more than one provider if it wasn't tied to my mortgage.

You can do a partial withdrawl when buying a house.

Tom

That’s correct. I tested the system the other day. Made a payment of 6883 at once and a week later wanted to make another one all the same. The second transaction was rejected by the bank.

But if you had an account with another provider they probably wouldn't know - that check only works within one provider.

Or does it? I don't think there's any central register of 3a accounts, the only final check is on your tax return.

You mean rejected by the receiver (3rd pillar) or by the bank (account you sent the money from)?

If somebody had, let's say, 4 accounts, I wonder what would happen if somebody paid 6883 chf into each account?

Rejected transaction to 3a intermediary account from which it goes to the pension investment.

You may be able to pay in, but only the maximum of ~6800 is tax deductible. Ordinary payout will get taxed (at a preferential rate), so the surplus will get income-taxed twice.

The best you could do is request a cancellation of the surplus payins.

It's recommended to have multiple 3a accounts, that will enable you to spread payout over multiple years, and thereby reduce the tax burden. The acceptable number of accounts may be limited, talk to your bank or the tax office.

Sometimes, it’s tough choice. You keep the 3a for tax purposes but at the same time putting more into stock invested pension fund becomes lucrative, its interest beats the savings on 3a.

Unfortunately, this not always the case. I know a person who had set up a standing order last year and forgot about it. They paid in the maximum amount via a normal payment into the 3a account and a few days later, the standing order kicked int and the maximum amount was paid again into the same account. They had totally forgot about the standing order, didn't even notice that they had paid twice until the accountant checked the Pillar 3a bank documents for the 2020 tax declaration. Now it is not an easy process to get the money back. The bank won't release until they get a statement from the tax authorities. The tax authorities have acknowledged the issue, but well, you know how long it takes for such a thing to happen. So the money is locked.... And it cannot count as the 2021 contributions, I guess...

I guess on the plus side the dividends probably won't be taxed, nor will the sum be up for wealth tax.

Even if you lose the 20% upfront, maybe it isn't so terrible.

3a and stocks aren't mutually exclusive.

CHF 6,883 for 2021 and 2022 if one belongs to a pension fund and pays pension fund contributions.

Or, upto 20% of net income, capped at 34’416, if one does not pay any pension fund contributions.

This happened to me in 2019. I paid double into the 3rd pillar.

When I completed my 2019 tax return, I claimed only for the maximum allowed, and after a while, the fiscal authority sent a letter for me to pass to the bank, to enable the transfer of the double payment back.

It all happened within weeks and was a relatively minor inconvenience.

i think in essence that is the question we were looking at answering

I got two 3a accounts. I will withdraw them in separate years, my tax-total will be lower (as I have to pay tax on it when I withdraw, even if it is a special rate).

To put more than the deductible amount into 3a is not smart, there are better places to invest and the money is stuck.

The point to stick your money into 3a is the deductibility. It's the only reason in my view. Therefore the "central register of 3a" is the tax-office. And you already established they have a max. they let you deduct.

__________________
It's all a matter or perspective.
So move your butt and look at it from the other side

Worth adding that the best arrangement of pillar 3a is to have five, to withdraw in consecutive years so as to minimise the tax due. You can have multiple accounts with one provider.

Well, not exactly. You forgot to mention the pillar 3a’s a good use for mortgage.

I don't follow.