Pillar 3a early withdrawal: Fee comparison

Letztes Update: 28. September 2023

Many pillar 3a comparisons focus on ongoing costs or perhaps still on returns. In this comparison, however, we’ll take a look at the fee-based services offered by digital pillar 3a providers. First, let’s look at what transfer, withdrawal and early withdrawal options there are in the tied pension plan at all and then follows the table with the pillar 3a early withdrawal fee comparison.

No or low fees are certainly not a main argument when choosing a 3a provider. But if you know that you want to withdraw your pension benefits soon, it certainly doesn’t hurt to take a look at the table.

Withdrawing your Pillar 3a assets always has tax consequences (capital payment tax). In this article, only a superficial discussion of the tax issue is given. For larger sums, it is worth consulting a specialist.

Transfer to another pillar 3a provider

The transfer of pension assets is usually free of charge and straightforward with most providers. You inform the old provider in writing which account or securities account you want to close and to which provider he should transfer your assets. You can find the relevant forms on the website or in the app of your new provider.

If you switch your invested pension assets from one provider to another, the securities are sold and bought again from the new provider. Depending on the securities and provider, unnoticed spreads, redemption and issuance commissions, currency exchange fees, stamp taxes, etc. may apply. You never see these costs as absolute amounts of francs. So such a change is never completely free.

When switching from a pillar 3a account to a new provider, you should be aware of any fees for account balancing and notice periods, which can be up to three months with some providers.

Gaps in the pension fund can also be closed with funds from pillar 3a. Because this is usually not attractive from a tax point of view, we will not go into this further.

Ordinary resolution

You can liquidate your third pillar at the earliest five years before reaching AHV age (men 65 and women 64). If you continue to work after AHV retirement age, you can draw Pillar 3a up to five years after that at the latest. For this reason, it may make sense from a tax perspective to have several Pillar 3a custody accounts or accounts and to stagger withdrawals. The cantons handle this differently. The best thing to do is to check with your canton well in advance of retirement.

Disability or death

You can draw the third pillar capital if you receive a full disability pension from the Swiss Federal Disability Insurance (IV) and the disability risk is not covered by supplementary insurance under the tied pension plan. A whole disability pension is paid by the IV for at least 70% disability.

If you die before reaching AHV age, your Pillar 3a capital will be paid out according to the beneficiary regulations. The order of beneficiaries is regulated by law and you will also find this in the pension regulations of your pension foundation. Certain changes to the order are possible. You can inform the pension foundation of this in writing. So is the division of claims. Many providers offer forms for this on their websites or apps.

Self-employment

If you become self-employed and set up a sole proprietorship or a partnership, you can also make early withdrawals from your third pillar. If, on the other hand, you decide to found an AG or GmbH, you will then be employed by this company and therefore not self-employed. This is why you cannot withdraw your Pillar 3a capital when you set up an AG or GmbH.

In order to be able to make an advance withdrawal of capital, you must submit to the Pension Foundation a current ruling from the AHV compensation fund on your registration as a self-employed person. And you have to prove that you are engaged in self-employment as your main occup ation.

Withdrawal is only possible within the first year of self-employment. An early withdrawal is also possible in the event of a change in the previous self-employed occupation. However, the entire balance of the respective account or securities account must always be drawn. Partial withdrawal is not possible.

As a self-employed person or self-employed person, you can still pay into Pillar 3a even after you have made a withdrawal. If you are not affiliated with a pension fund, you can pay a total of 20% of your annual earned income, up to a maximum of CHF 34,416, into a Pillar 3a account or custody account.

Moving abroad

If you emigrate, you can withdraw your Pillar 3a capital, but you do not have to. Even if you decide to withdraw the money only a few years after emigration, it is possible. The latest date for drawing the pension is when the insured person reaches the regular AHV retirement age.

If you still live in Switzerland during the early withdrawal, you pay the capital withdrawal tax at your place of residence. If you are already registered abroad, your 3a capital is taxed at the withholding tax rate of the canton in which the 3a foundation is domiciled. In some circumstances, the withholding tax is lower than the capital gains tax. In any case, it is worthwhile to calculate your specific situation – not forgetting the taxes due in the new country of residence – and to discuss it with a specialist. In the table below you will therefore also find the names of the foundations and their respective headquarters.

Home ownership promotion (WEF)

The pension capital of the third pillar can be withdrawn when buying or building an owner-occupied home and used as equity capital. But you can also use the funds from the tied pension plan to repay the mortgage and for value-enhancing or value-maintaining investments. However, you may not use your Pillar 3a capital for second or vacation homes.

There is no minimum or maximum amount for the withdrawal. Within the framework of the WEF advance withdrawal, partial amounts can also be withdrawn, which is otherwise not possible. However, partial withdrawal is only possible up to five years before reaching the regular AHV retirement age. A WEF advance withdrawal is only possible every five years.

A capital gains tax is again due on the money paid out. This tax cannot be paid with the pre-drawn funds, but must be paid with unrestricted funds.

Unlike the second pillar, you cannot repay the capital in the case of an early withdrawal from the third pillar. However, you can still make new deposits up to the respective maximum amount.

You should take a detailed look at the framework conditions, tax optimizations and whether drawing the second pillar instead of the third pillar makes more sense, and consult a specialist if necessary.

Pledge

In the case of pledging as part of the home ownership promotion, the Pillar 3a capital is not paid out but remains in your account or custody account. It therefore continues to earn interest or to be invested in the stock market and capital gains tax does not apply.

The pledged pension assets allow you to increase your affordability; they serve as collateral for the lending bank. Only when you can no longer make the interest payments and/or amortizations on the mortgage does the lien foreclosure kick in. Again, the money may only be used for owner-occupied residential property.

Comparison of fees

The providers are listed in alphabetical order.

WP Data Tables

– means that there are no additional costs or that these are included in the respective all-in fee (“all-in fee”, “total fee”, “total costs”, “all-inclusive fee”, etc.).

¹ if resident abroad CHF 400

* VIAC also offers free risk coverage: for every CHF 10,000 of invested assets, VIAC will provide you with free basic coverage of CHF 2,500 (max. CHF 250,000) in the event of death or disability (70% – IV degree).

** Pledging is only possible directly to VZ and not to third party banks.

Extraordinary services and the resulting costs, such as address searches, etc., are not listed in the table. Some foundations also charge fees for partial payouts as a result of divorce. The table has been prepared with the greatest care, but please consult the fee schedules and cost regulations of the individual providers for the currently valid prices.

A notarized signature is usually required for withdrawal. You can have your signature notarized at notaries or at your municipality of residence. This usually costs around CHF 20 to CHF 30.

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