Pillar 3a in Switzerland: The 5 Biggest Mistakes to Avoid

If you live and work in Switzerland, you’ve probably heard of the Pillar 3a — the private, tax-advantaged savings account that’s meant to complement your 1st and 2nd pillars.

Almost everyone knows they should use it.
But many people use it badly — and lose thousands in missed returns, unnecessary taxes, or inflexible choices.

Here are the five most common mistakes I see as an actuary — and what you can do instead.

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Mistake #1 – Treating 3a like a savings account

Many people open their 3a at the same bank where they have their salary account.
They end up in a cash-based 3a, earning less than 1 % interest.

Why it’s a problem:
Inflation quietly eats away your purchasing power. Over 20 years, the real value of your savings can drop by more than 20 %.

Do this instead:
Choose an investment-based 3a (like Finpension 3a, VIAC, or Frankly) that allows 60–99 % equity allocation. Even with market ups and downs, long-term returns are much higher.

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Mistake #2 – Ignoring fees

Fees compound too — but in the wrong direction.
Many traditional banks still charge 1 %+ in total costs, while digital providers are closer to 0.4 %.

Why it matters:
The difference between 0.4 % and 1.0 % fees over 25 years can easily exceed CHF 35 000–40 000 for a typical saver.

Do this instead:
Compare total expense ratios (TER).
Platforms like Finpension 3a (0.39 %) or VIAC (0.41 %) consistently rank among the lowest-cost options.

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Mistake #3 – Waiting until December to contribute

Many people transfer their 3a contribution only once per year — in December, often just before the tax deadline.

Why it’s a problem:
You miss out on months of potential investment growth every year.
If you invest only once annually, your average time in the market is much shorter.

Do this instead:
Set up monthly or quarterly contributions.
You’ll smooth out market fluctuations (dollar-cost averaging) and stay disciplined.

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Mistake #4 – Keeping only one 3a account

By law, you can split your 3a into several accounts.

However under Swiss law, each 3a account (pillar 3a) can only be withdrawn in full once.
You cannot make partial withdrawals from the same account at different times. (Source: fedlex.admin.ch – BVV 3 (Art. 3))

Yet most people keep just one — and later face a big tax shock when they withdraw everything at once.

Why it’s a problem:
Lump-sum withdrawals are taxed progressively, so splitting into 2–3 accounts and withdrawing them over several years can cut your tax bill by 10–30 %.

Do this instead:
Open a new 3a account every few years.
When you retire (or withdraw early for home purchase), you can stagger the withdrawals.

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Mistake #5 – Forgetting to review your investment strategy

Life changes — salary, risk tolerance, family situation, retirement goals.
But most people never log in to check if their 3a still fits their situation.

Why it’s a problem:
An overly conservative allocation or outdated fund mix can cost you significant growth over time.

Do this instead:
Review your 3a once a year:

• Check your equity percentage
• Rebalance if markets shifted strongly
• Adjust if you’re within 5 years of planned withdrawal

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Takeaway

“Most 3a mistakes are not emotional — they’re structural. People set it up once, assume it’s done, and forget that small optimizations compound quietly for decades.”

The 3a system is one of the few tax-efficient investment tools available in Switzerland. Used properly, it can add hundreds of thousands to your retirement wealth.

Summary – What to remember

Mistake	What to do instead
Keeping 3a in cash	Invest in equity-based 3a
Paying >0.5 % fees	Choose Finpension, VIAC, or Frankly
Paying in only once per year	Automate monthly payments
One single 3a account	Open 2–3 and stagger withdrawals
Never reviewing allocation	Reassess yearly, especially before retirement

Suggested next read

Pillar 2 Buy-In vs Pillar 3a – Which Wins (and When?)

Educational content only; not individualized tax or investment advice. Confirm details with your pension fund/provider and your canton’s tax office.