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The tax deduction for the restricted private pension plan (pillar 3a) has been updated for the 2025 tax year. This adjustment is relevant for taxpayers who wish to benefit from the new regulations. The specified deduction amounts are as follow:
- Maximum pillar 3a deduction for taxpayers with a 2nd pillar pension plan: CHF 7’258
- Maximum pillar 3a deduction for taxpayers without a 2nd pillar pension plan: CHF 36’288
I Effects
The changes to the maximum deduction for pillar 3a have several important effects. The higher deduction options lead to a lower tax burden and enable taxpayers to save specifically for their retirement provision.
For people without a 2nd pillar pension plan in particular, this is a good opportunity to increase their pension entitlements and better prepare for the future. These regulations encourage people to actively save for their old age and develop a savings strategy. Ultimately, all taxpayers benefit from these adjustments, as they can improve their financial security in retirement and benefit from tax advantages at the same time.
II Measures
The maximum deductions for pillar 3a are also the maximum amounts that can be paid into the restricted private pension plan each year. It is crucial that these payments are made before the end of the respective calendar year in order to ensure that the tax benefits are optimally utilised and that retirement planning can be implemented in good time.
III Retrospective contributions – possible plans for the future
On 22 November 2023, the Federal Council initiated a discussion on the possibility of retroactive contributions into pillar 3a. The aim is to give people who have made no or only partial contributions in certain years the opportunity to close these gaps retroactively for up to ten years. For a contribution into pillar 3a to be possible, the person in question must have earned income subject to pillar 1 social security contributions in Switzerland in the year in question and have paid the regular pillar 1 annual contribution in full. In addition, the additional contribution, like the regular contribution, should be fully deductible from taxable income, which would further increase the tax advantages of pillar 3a. However, the corresponding ordinance of the Federal Council has not yet been legally enacted and is still subject to discussion.
RSM Switzerland remains at your disposal to answer any questions and to provide you with further information to advise you on your personal tax situation.
Source: Zinssätze / Höchstabzüge Säule 3a bei der Direkten Bundessteuer| ESTV (admin.ch)
