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Both the restricted (pillar 3a) and the unrestricted (pillar 3b) pension plans offer tax benefits. With the restricted pension plan (pillar 3a), the insurance premium may, up to a certain limit, directly be deducted from the taxable income. Individuals who are affiliated to a second-pillar occupational benefit plan can make a deduction of 7056 francs for pillar 3a and those who have not joined such a pension scheme can deduct 20 percent of the taxable net earned income (CHF 35,280 max.). Unrestricted pension plan (pillar 3b) premiums can be set off as flat-rate deduction; there are no specific deductions from taxable income for pillar 3b.
During the contract period, whole life insurance within the framework of the restricted pension plan (pillar 3a) is exempt from income, property and withholding tax. By contrast, whole life insurance of the unrestricted pension plan (pillar 3b) is subject to property and withholding tax and partly to income tax.
Lump-sum benefits of a whole life insurance of the restricted pension plan (pillar 3a) are taxed as income. Such lump-sum payments are generally taxed at a special, lower rate. Payout of a whole life insurance of the unrestricted pension plan (pillar 3b) is tax-exempt with conditions.
With our tax calculator you can, for example, find out how much you can save on taxes if you deduct your restricted pension plan premiums from your taxable income.