It’s important to start private retirement planning early – we explain why in the article “Retirement planning: your first steps to becoming an investor”. This article provides a practical overview of the three-pillar principle and its components. Most people will be familiar with private retirement planning via the 3a pillar. This is a fixed plan which means you cannot freely access the money paid in at any time. However, it does not mean that the pillar 3a can only consist of an account – there are various options available for pillar 3a retirement planning. You can either use a retirement savings account or you can invest in a retirement fund. The differences between the conventional retirement savings account 3a and retirement funds are explained here:

Minimum and maximum amount and inpayment

Retirement savings account 3a

There is no minimum inpayment or any obligation to open a retirement savings account. A certain maximum amount may be deducted from taxable income provided it has been paid into the account by the end of the tax year. You can read our best tips on saving on taxes with your retirement planning in our article “Retirement savings 3a: save on taxes with these tips”. The amounts for employees and self-employed persons (with the OPA pension fund) are redefined each year. You can consult the currently applicable maximum amounts on the The link will open in a new window Confederation’s information page.

Retirement funds

You can also purchase a retirement fund even if you already have a retirement savings account 3a. With attractive and flexible options, you are free to decide how much you want to invest in your retirement fund and how you wish to create your fund order. For example, you can choose to regularly invest for the future with the funds saving plan. The advantage of the funds saving plan is that you can regularly invest small amounts (from CHF 100 per month) from your retirement savings account 3a in funds. Or you can choose to set up a standing order to pay into a retirement fund, meaning your future payments will be automatically invested in your retirement fund. Of course, you can also choose to invest your retirement capital in a retirement fund on a one-off basis (all of your retirement assets or a specific amount).

Withdrawal of assets / investment horizon

Retirement savings account 3a

Once paid in, your retirement assets remain in your account until at least five years before your retirement. Advance withdrawal is only possible under certain conditions, for example, if you use the money to buy your own home, to leave Switzerland or to become self-employed. Another special case is full invalidity in the event of which assets can be withdrawn. The retirement savings account is generally a long-term investment – how long depends on when you start paying into it.

Retirement funds

You can pay money from your retirement fund back into the retirement savings account 3a linked to it at any time. However, you cannot have the money invested transferred or paid out to any account. You can decide for yourself whether you wish to keep your investment in your retirement fund over the medium or long term.

Risk

Retirement savings account 3a

In terms of risk, there is little difference between your retirement savings account and a savings account: there is only a risk of loss in the event of the bankruptcy of your bank or pension foundation. In this case, various laws enter into force which protect your money up to a certain amount.

Retirement funds

As with all funds, there are various risk classes available with retirement funds – your fund will be exposed to varying degrees of fluctuation in value depending on the risk class. The level of risk you wish to assume is determined by your choice of fund based on your investor profile and investment horizon. If your bank enters into bankruptcy, funds are classified as segregated assets and are not included in your bank’s bankruptcy estate. Are you new to the world of investment? If so, you’ll find the answers to key questions on the topic of financial investment in our article for newcomers. 

Performance of assets

Retirement savings account 3a

You receive a standard market rate of interest annually and benefit from the compound interest effect as you are leaving your retirement assets in your retirement savings account over a long period of time. However, the continued low-interest environment is having a negative impact on the compound interest effect. Want to know more about the compound interest effect? Read our article “The compound interest effect explained in simple terms” to understand what it’s all about and how you can benefit from it.

Retirement funds

With funds you generally benefit from higher returns on average than with a retirement savings account 3a. However, you have to accept price fluctuations depending on how much risk you can or wish to assume. This depends on the weighting of shares in the fund selected. As the investment horizon tends to be long-term with retirement assets, a higher risk can be assumed which may in turn be rewarded by higher returns. Over a longer period of time, a retirement fund has the chance to recover in the event of downturns in the market.

Private retirement planning is important and a retirement savings account is the first step in the right direction. However, it is also worth considering setting up a retirement fund. You decide for yourself on the level of risk you wish to assume. The range of retirement funds with different equity components provides an ideal solution for all investors. You can find more information by consulting our range of retirement funds − your advisor will also be happy to help.