Making tax-deductible buy-ins to pillar 3a

Building up retirement savings through tied pillar 3a offers attractive tax advantages to anyone who carries out a gainful activity or receives replacement income subject to Old-Age and Survivors’ Insurance (AHV/AVS). Contributions paid into a tied savings scheme are fully deductible from taxable income.

From 1 January 2025, a regulatory revision introduces important changes that allow insured persons to close contribution gaps that have arisen in pillar 3a. These buy-ins, which are also tax-deductible, can increase private savings set aside for retirement.

Revision of pillar 3a

In June 2019, Member of the Council of States Erich Ettlin proposed a regulatory amendment to allow insured persons to close any contribution gaps in pillar 3a caused by missed contributions or contributions below the legal maximum, thereby allowing retrospective payments – known as buy-ins – which are also tax-deductible and intended to increase private retirement savings.

The aim is to strengthen individual responsibility for building up retirement savings and to allow the recovery of “missed contributions” for people who in the past were unable to fund their private pension provision, such as women who devoted themselves to their families or people on modest incomes whose financial situation subsequently improves.

After a long and lively legislative process, the new Ordinance on Tax Deductions for Contributions to Recognised Pension Schemes (BVV 3/OPP 3) was adopted in 2024 and came into force on 1 January 2025.

What are the conditions for making a buy-in to pillar 3a?

The Ordinance governs the principle of deductibility of contributions to the tied third pillar, and the new provisions that have just come into force set out in detail the conditions under which a buy-in is possible. In particular:

Time validity: since the revised Ordinance comes into force on 1.01.2025, the first gaps in pillar 3a will arise during the current year. They can therefore only be bought in from 1 January 2026. Gaps prior to 31 December 2024 cannot be recovered.
Eligible persons: both employees and self-employed persons can make buy-ins to pillar 3a, provided that they received earned income in Switzerland subject to AHV/AVS in the year in which the gap arose.
Ordinary contributions: the ordinary contribution for the current year must be paid in full before making the buy-in. The buy-in must be made in addition to it, not instead of it.
Maximum amount: The maximum amount that can be bought in corresponds to the “small deduction” for employees and self-employed persons affiliated to the BVG/LPP (Federal Act on Occupational Pensions). This limit applies to both employees and the self-employed and refers to the year in which the buy-in is to be made (CHF 7’258 for 2025).
Single payment: Each gap can be closed with a single buy-in and cannot be made up through several buy-ins in different years. However, it is possible to close several gaps relating to different years with a single payment.
Age-related restrictions: from the age of 60, i.e. five years before the ordinary retirement age, it is possible to draw tied individual pension provision from pillar 3a early. Under the new rules, early withdrawal of pension assets ends the possibility of making further deductible contributions to pillar 3a. This provision is based on the assumption that the insured person, by starting to draw pension benefits, has in fact begun their transition into retirement. As a result, it is no longer possible to optimise pension provision through tax-deductible contributions.

What is the procedure for making a buy-in to pillar 3a?

To make a buy-in to the tied third pillar, the insured person must:

submit a prior request: send the application to their pension institution, providing all the information needed to establish the contribution gap.
self-certify the conditions: declare that the required conditions are met and provide other relevant information such as the amount of the buy-in, the reference year of the gap and the amount of the partial contribution paid in that year.
wait for acceptance: the pension institution carries out procedural checks and accepts or rejects the request, issuing a certificate for use in the tax return.

Conclusion

Although the conditions for paying buy-in contributions into pillar 3a impose significant limits and do not fully meet the needs identified in the original motion, this new opportunity may nevertheless be of interest to some taxpayers. In particular, it is aimed at those who, for various reasons, are not currently paying the full amount into pillar 3a.

However, before undertaking an operation of this kind as part of pension optimisation, it is essential to have a complete picture of your pension situation. All the implications relating to the three pillars of the Swiss pension system must be carefully considered.

To ensure accurate and well-informed planning, we recommend carrying out a detailed analysis of your current situation. This makes it possible to identify all possible areas for action, assess them in the light of your means and set your personal priorities.

Assidu SA is at your side to support you in these assessments and to guide you in building forward-looking retirement planning that is personalised and suited to your needs.

Article written by:

Diana De Luca

Retirement planning specialist

Insurance intermediary VBV/AFA