Switzerland offers taxpayers a lot of freedom. This also means that the state supports natural persons with their pension provision by promoting deductions in this context and reducing the tax burden. Those who put a little thought into this will certainly benefit from it. Have you ever considered buying into a private or professional pension plan? Here, you’ll find out whether and how clever pension management affects your tax bill and your pension capital.

Buy into the second or third pillar?

Depending on your income situation, future plans and age, buying into an occupational pension plan (second pillar) or private pension plan (third pillar) is an attractive way to save on taxes and invest retirement capital at the same time. Buy-ins into the two pillars have different characteristics. Decide for yourself what suits you best. Of course, buying into both the second and third pillars at the same time is also possible.

Purchase of additional second pillar benefits: Best spread over several years

You can deduct any amount that you pay into your pension fund from your taxable income. Please note:

  • A prerequisite for buying in is a gap in coverage. This is available to most people and can be seen on the pension certificate (maximum buy-in amount).
  • Depending on the pension fund, a buy-in must be at least CHF 5,000.
Calculation using a specific example:

Christof Muster lives in Lucerne and reports a taxable income of CHF 75,000 for 2023. His tax bill is CHF 10,915.

If Christof Muster had decided to purchase additional pension fund benefits (second pillar) totalling CHF 20,000, he would have saved at least CHF 3,923 in taxes:

Buy-in                              

Annual tax bill       

 Annual tax savings         Total tax savings
1 x CHF 20'000.-        CHF 6'992.- CHF 3'923.- CHF 3'923.-         
2 x CHF 10'000.- CHF 8'935.- CHF 1'980.- CHF 3'960.-
4 x CHF 5'000.- CHF 9'908.- CHF 1'007.- CHF 4'028.-


In the table, you can see that Christof Muster benefits most if he spreads his buy-in amount over four years.

Positive side effect: more savings capital

In addition to the tax savings, you benefit from a higher retirement capital and possibly also from higher risk benefits or lower risk premiums

You can find more facts and tips on purchasing additional pillar 2 benefits here.

Purchase of additional third pillar benefits: plenty of design freedom

You can buy into the third pillar and deduct purchases directly from your taxable income, thereby reducing your tax burden. Please note:

  • Maximum amount for employed workers (employees): CHF 7,056 (year 2023)
  • Maximum amount for self-employed individuals: 20% of annual income, maximum CHF 35,280
Flexibility in product and investment

In the third pillar, you have the choice between bank products (e.g. savings accounts, investment funds) and insurance products (e.g. mixed life insurance). You can choose how to invest your money with both products. For this long-term investment, it may be worth investing in securities such as funds or ETFs to benefit from the long-term return opportunities of the markets. Both your capital and the associated profits are exempt from tax until paid out.

You can find more facts and tips on purchasing additional pillar 3 benefits here.

Tellco offers all possibilities

Whether it’s a buy-in into your second pillar at Tellco pk or an attractive digital 3a account – with us, you’ll find all the options to potentially make your tax bill a little lower next year while making your savings capital grow at the same time.

The most important summarized
  • Save on taxes with pension capital
  • When it makes sense to purchase and what should be taken into account
Information on the subject
The most important things about pillar 2 Fact sheet on buying missing contribution years Tellco Pension 3a Account

Read more about the following topics:

Pension fund Employees Private pensions Private individuals Pension asset 3a
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