Pillar 3a – why the Swiss pay into a private pension

One in two people have already started saving for leaner times. Source: istock

A round-the-world trip, a classic car, moving to warmer climes – are these the dreams that the Swiss want their third pillar to pay for? The latest Comparis survey on retirement pensions reveals that the truth is less idyllic.

Of the 1,590 people surveyed by market research institute innofact, half said they paid into a private pension, the main reason being to ensure that they were financially better off during retirement (59 per cent). Clearly, the reason for saving is to supplement the state and occupational pensions. 38 per cent opted for a private pension because of tax considerations. Only 16 per cent wanted to use the money to fulfil a big dream like a round-the-world trip, house or car. This reason was more popular in the Italian-speaking part of Switzerland, given by 21 per cent of respondents, compared to the German-speaking part (16 per cent). Another motivating factor was the potential cost of care that may be required in old age. This reason was most prominent in the Italian-speaking part of Switzerland (36 per cent) and least prominent among the German-speaking Swiss (11 per cent).

In total, half the respondents were paying into a private pension. This shows how important private pensions are to people in Switzerland. Indeed, two thirds of employed persons believe that the pensions from the first and second pillar will, when the time comes, provide less than 60 per cent of their current income. Only 20 per cent think otherwise. In this respect, it appears that men are more optimistic than women. 

Marc Parmentier, banking expert at, explains this situation as follows: “Since women often work part-time and have contribution gaps due to maternity breaks, they are more pessimistic about their retirement provision.” Divorced women with fewer years of employment and no pension provision are particularly at risk of facing a pension gap when they retire. 

And what is the view of those already retired?

Half of pensioners said that the income from the first and second pillars was not enough to maintain the standard of living they had enjoyed when they were working. “Experience shows that pensioners need around 70 to 80 per cent of the income they earned from employment to maintain their standard of living,” says Parmentier. He recommends investigating the subject of pensions as early as possible. Even if one in two respondents are already saving in pillar 3a, that still leaves half who are not. The main reason for this is that, according to the information provided, the majority (70 per cent) of those without a private pension and who earn less than 4,000 francs gross per month simply cannot afford to pay into the third pillar. Nonetheless, because of the interest rate effect, it is still worth putting aside small amounts for retirement.

To help in this regard, our partner service Optimatis offers a pension review. Its pension experts will go over your current pension arrangements with you to establish whether you will have enough money to retire on. You just need to provide a few details about yourself, and in a few clicks you can request a no-obligation consultation. Interested in finding out how you stack up?


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