Moving to Switzerland comes with many financial advantages, but also with a pension system that can feel complex. Beyond the state pension (AVS) and the occupational pension (LPP), there is a third layer called the pillar 3a or tied pension. This voluntary retirement savings scheme is one of the most effective ways to reduce your taxes while building long-term security.

For Swiss residents, pillar 3a is well-known. But for expats, the question is less obvious: does opening a pillar 3a make sense if you are not sure how long you will stay in Switzerland, or if your career path is international, knowing that withdraw from the pillar 3a are strictly regulated.

In this article, we will explore how pillar 3a works, its tax benefits, its flexibility, and the specific points that expats should carefully evaluate before deciding.

What is Pillar 3a?

Switzerland’s pension system is built on three layers, often called the three pillars. The first two — the state pension (AVS/AHV/OASI) and the occupational pension (LPP/BVG) — are compulsory for anyone working and living in Switzerland. The 3^rd pillar is voluntary and designed to give individuals more flexibility in preparing for retirement.

Within the third pillar, there are two options: pillar 3a (restricted) and pillar 3b (flexible). Pillar 3a is the most common, especially for employees. It allows you to contribute money each year into a dedicated account or policy, with two key advantages:

Tax savings: Your contributions (up to CHF 7,258 in 2025 if you are employed, or up to 20% of income with a cap of CHF 36,288 if you are self-employed) can be deducted from taxable income.
Long-term savings: The money grows tax-deferred until withdrawal, which is usually at retirement, or earlier under specific conditions (buying a home, becoming self-employed, leaving Switzerland, etc.).

Because of these features, pillar 3a is not just a savings plan, it is both a tax tool and a retirement planning instrument.

Rules and Limits of Pillar 3a in 2025

If you are working in Switzerland and pay into the Swiss social security system (AVS/AHV/OASI), you are eligible to contribute to a pillar 3a account. The rules are straightforward, but the exact limits depend on your employment status.

For employees (with an occupational pension, LPP/BVG):
You can contribute up to CHF 7,258 per year in 2025. This amount is deductible from your taxable income, meaning you immediately reduce the tax you owe.
For self-employed individuals (without an LPP/BVG):
You can contribute up to 20% of your net income, capped at CHF 36,288 per year in 2025.

When Can You Withdraw Pillar 3a Funds?

Unlike a normal savings account, pillar 3a assets are tied. You cannot simply withdraw them at any time as the restriction is precisely what gives the 3a its tax benefits. That said, Swiss law defines several situations where early withdrawal is possible, in addition to the standard payout at retirement.

Here are the five main cases:

Buying a home for your own use
- You can use pillar 3a money to buy, build, or renovate your main residence.
- It also applies to repaying a mortgage or buying shares in a housing cooperative where you live.
Becoming self-employed
- If you leave salaried employment to start or take over a self-employed business (and register officially with the AVS/AHV/OASI), you can withdraw your 3a funds.
- This is only possible once, and only if you are no longer affiliated with a pension fund through employment.
Leaving Switzerland permanently
- When you move abroad, you can close your 3a and withdraw the funds.
- This applies whether you leave for an EU/EFTA country or outside the EU, although specific rules may apply depending on your destination.
- Alternatively, you may keep the 3a account and defer withdrawal until retirement age.
Full disability
- If you are declared fully disabled by Swiss Disability Insurance (IV), and your 3a does not already cover disability risk, you may withdraw your savings early.
- This applies only in cases of long-term, total disability recognized officially.
Buying back years of pension contributions (2nd pillar)
- You can transfer your 3a funds into your occupational pension plan (LPP) to cover contribution gaps.
- Transfers are tax-neutral: no extra deduction, but you move assets from one pillar to another.
- Note: you cannot use 3a funds to repay withdrawals made earlier for home ownership (EPL).

Is Pillar 3a Really Worth It for Expats?

Deciding whether to open a pillar 3a as an expat depends on your personal situation, especially how long you expect to stay in Switzerland.

Why it often makes sense:

Immediate tax savings: Every franc you contribute (up to CHF 7,258 in 2025 for employees) lowers your taxable income. In high-tax cantons like Geneva or Vaud, this can save several thousand francs per year.
Long-term wealth building: The 3a allows investment in funds, often equity-based, so your savings can grow beyond simple cash interest.
Even if you leave Switzerland early: You can withdraw your 3a when you move abroad at a reduced rate (1/5^th of your tax rate).

Where you need caution:

Tax agreements with your country: In some cases, depending on the timing of the withdrawal, your new country could tax again your 3a capital (mostly if no double-tax treaty exists with Switzerland)
Restricted access: Unlike the 3b or other savings, your money is locked unless you meet the legal withdrawal conditions.
Short stays: If you know you will be in Switzerland only 1–2 years, the administrative effort and potential tax complexity on exit clearly outweigh the benefits.
US-persons: Many 3a providers don’t allow US-persons to sign up for a pillar 3a.

Rule of thumb:

If you plan to stay at least 5 years and pay significant Swiss income tax, a pillar 3a is usually worth it.
If your stay is very short or uncertain, a more flexible savings strategy may be preferable.