The pillar 3b is a private, voluntary scheme available to residents of Switzerland.
Unlike the pillar 3a, there is no income tax deduction for money invested into the pillar 3b. Growth and income on investments within the pillar 3b are still tax free, however, and there is not tax on withdrawals.
The exception to this is Geneva, where married couples can deduct a further CHF 3,326 in pillar 3b contributions from their taxable income, and an extra CHF 907 per child.
Investment options under pillar 3a and 3b are identical – broadly speaking there are 3;
Variable interest rate; based on the Swiss base rate but typically in the range of 0-1% p.a.
Capital guaranteed + funds/ETFs; a combination product providing protection + investment growth, usually averaging 3-6% p.a.
Funds/ETFs + no guarantee; effectively an investment portfolio with no protection sitting within a pension structure, historically returning 3-14% p.a. (investment selection dependent)
There is also no upper limit on annual contributions, and access to money is more flexible – any time and for any reason (product dependent).
This flexibility means you can use a pillar 3b towards a number of goals…
Start Here and we can help you calculate how much you should to save, for when, and explain the best options available