3a pillar in Switzerland: Get to know the best providers

pension planning

If you've started on your financial journey, you have likely come across the terminology '3a pillar.' The 3a pillar is a crucial part of Switzerland's pension system, allowing you to save for retirement with attractive tax benefits. In this article, I will provide a quick recap of the benefits of this financial instrument before we explore the top 3a pillar providers, helping you make informed decisions to secure your financial future.

Table of contents

3a pillar in Switzerland: Get to know the best providers
Quick recap on 3a pillar in Switzerland
What you should look out for when choosing your 3a provider
3a pillar: Provider overview
3a pillar provider: My personal favorite

Quick recap on 3a pillar in Switzerland

The 3a pillar is part of the Swiss pension system. The 1st pillar is state pension, 2nd pillar is occupational pension and the 3rd is your private pension. You can imagine which pillar will be the most reliable. Needless to say: The 3rd pillar, specifically the 3a pillar, plays a crucial role in retirement planning.

By opening up a 3a account, you can make regular contributions, which a) reduce your taxable income and b) allow you to invest that money in stocks or ETFs that yield higher results than putting it aside in a traditional saving account. Unfortunately, there are certain limits on how much employees and self-employed can contribute, but it’s still a very good financial tool.

If this topic is new to you, I have compiled everything you need to know about the 3a pillar in this blog article.

What you should look out for when choosing your 3a provider

I’m assuming that you already understand the ample benefits of a 3a account and you are now ready to take the first step: Opening up your 3a account. Congrats! In my opinion, there are a couple of things to look out for when deciding on your 3a provider:

Bank or Insurance: You can choose to open up a 3a account with a bank (traditional and fintech) or an insurance provider (mostly life insurances). I’m going to be very honest and biased with you: I’m pro banking solutions in this case as you have more investment options for your money. In my experience, insurances only make sense if you are looking to invest in a life insurance product that you’ve determined that you require.
Traditional bank or fintech: You can opt for a 3a account with a traditional bank like UBS, PostFinance or Raiffeisen. Alternatively, there are more and more fintechs entering the market offering the same possibilities, often at lesser fees and with more flexibility. We’ll get to the details in a bit.
Investment options: If you have a certain asset type or strategy in mind, such as only investing in sustainable companies, you should make sure ahead of time, if the 3a pillar provider can fulfill that. Maybe you are looking for high risk – high returns? In that case you could research if the provider allows a 99% stock investment.
Fees: At the end of the day, the money you keep is what counts. So, make sure your provider doesn’t eat up your contributions with heavy fees. Luckily, the fintechs are very good at being transparent and offering easy to understand fee structures.

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3a pillar: Provider overview

Let’s get to it! I’ve compiled an overview of 8 providers that offer very good 3a structures. In the overview you will be able to see how their fees compare, if they give you interest on cash and what bank stands behind the service.

Here are the links for quick access:

VIAC: https://viac.ch/en/
Kaspar&: https://www.kasparund.ch/
SELMA: https://www.selma.com/de-ch
Frankly: https://www.frankly.ch/de/startseite.html
TrueWealth: https://www.truewealth.ch/
Inyova: https://inyova.de/
Finpension: https://finpension.ch/en/
Descartes Vorsorge: https://descartes.swiss/de-ch/

3a pillar provider: My personal favorite

I hope that the overview has made it easier for you to narrow down on a couple of providers for your 3a account.

Choosing a 3a provider is very individual or as a proper financial planner would say: “It depends”. It depends on who you are, how your case presents. Now if you’re an individual that’s an expat and don’t know who long you’ll be in Switzerland for, I would make sure that you have your money with one of the canton Schwyz based providers, as upon extraction (once you’ve fully moved away from Switzerland) you’ll need to pay source taxes on the money, and it’s best if they are lying in canton Schwyz as the source taxes there are the best value for money in that case.

If you’re planning on staying in Switzerland permanently or have a lump-sum in your 3a, I would push that over to TrueWealth as they have the lowest running costs at 0.25% overall.

If you’re being taxed at source, and aren’t earning above 120k salary, thus not handing in a tax declaration, you should hold off on investing in 3a.

If you don’t have your fuck-off fund filled and all your taxes paid, you should hold off of investing in 3a.

If you are still on the fence or can’t decide between two providers, here are my personal favorites: TrueWealth and finpension. TrueWealth might be obvious: They have the lowest fees (0,25%). Can’t beat that! Finpension on the other hand not only has low fees (0,39%), but they are also a clear winner if you have to pay source taxes.

FYI: Source taxes are payable by all non-Swiss individuals that live and work in Switzerland without a permit C.

If you do need a life insurance product - such as a disability insurance (EU) or a death insurance - only an independent prevention analysis can show if you need these - then it makes sense to have them in a risk-covered-only insurance. Read more on the life insurance article here.