Under a new law that went into effect on 1 January 2025, if you haven’t deposited the maximum amount into your Pillar 3a account for a given year, you’ll be able to do so retroactively. This change is intended to help people put away more money for retirement. It also offers tax benefits, as the retroactive contributions will be tax deductible the year they’re made. One caveat: if you’re a US person, you need to consider the US tax treatment of Pillar 3 accounts, which can be disadvantageous.
As the end of the year approaches, many people who work in Switzerland decide on how much to contribute to their Pillar 3a account. If that’s something you do, then the recent change to pension legislation will interest you.
Pillar 3a accounts are individual retirement accounts designed to supplement your regular Swiss social security (AVS, or Pillar 1) and your occupational pension plan (LPP, or Pillar 2). With a Pillar 3a account, you can add to your retirement savings. The funds can also be released in the event of disability or death.
To encourage taxpayers to pay into their Pillar 3a account, they are allowed to deduct their contributions from their taxable income, although there is an annual contribution limit.
In an important legislative change, starting in 2026, you’ll be able to fill in any gaps in your Pillar 3a contributions – that is, shortfalls relative to the maximum amount – for prior years. This will allow you to both boost your retirement savings and save taxes.
For which years will I be able to close contribution gaps into my Pillar 3a account?
The first year in which you can make retroactive contributions is 2026, for 2025. You cannot close any contribution gaps for years prior to 2025. Going forward, you’ll be able to make such voluntary contributions for up to ten years earlier. For example, in 2034, you’ll be able to close the contribution gap for years going back to 2025.
Is there a limit to the retroactive contributions I can make?
The maximum retroactive contribution is capped at the lower limit applicable for the year the contribution is made. In other words, this limit – the “small contribution limit” – is equal to the maximum possible contribution for people who also have an occupational pension plan. The same limit will also apply to people who do not have an occupational pension plan, such as the self-employed.
For 2025, the contribution limit is CHF 7,258. If we take the example of someone who made no Pillar 3a contributions in 2025, then the maximum amount they will be able to pay in 2026 is CHF 14,516, composed of:En 2025, la petite cotisation s’élève à CHF 7’258. Si une personne ne cotise pas du tout en 2025, ses versements en 2026 pourront donc atteindre CHF 14’516 :
- CHF 7,258 for 2026
- CHF 7,258 for 2025
What are the criteria for being able to make retroactive contributions?
Because retroactive contributions are intended to help close contribution gaps, they can only be made by people who are eligible to pay into a Pillar 3a account. In addition, retroactive contributions cannot be made in place of your regular contributions for the year underway. There are therefore three criteria you must meet:
- You must have received income subject to Swiss social security taxes in the year for which you want to make a retroactive contribution.
- You must have received income subject to Swiss social security taxes in the year during which you want to make a retroactive contribution for a prior year.
- You must have already made the maximum Pillar 3a contribution for the year during which you want to make a retroactive contribution for a prior year.
What are the tax benefits of making retroactive contributions?
You can deduct the contributions you make from your taxable income. So it’s clearly in your interest to make up for any contribution shortfalls in prior years.
Conclusion: Our suggestions for closing your Pillar 3a contribution gaps
The new rules are actually quite complicated, however, and some of the finer points could work against you. For instance, you can make a single payment to cover shortfalls in several years, but you can’t make several payments to cover the shortfall for any one year. So depending on how big the amounts are, it might be better to pay less than the maximum or to carry a shortfall until you can make a bigger contribution.
Also, the Swiss government may revoke the tax deductibility of retroactive contributions made within three years before you withdraw your retirement savings. This issue still isn’t clear. In any case, don’t wait until the last minute to plan for retirement – contact us today to see how you can use this new opportunity to enhance your retirement savings and lower your tax bill.
