Extra pillar 3a contributions: what are the benefits?

Pillar 3a pensions allow people in employment to save for old age and reduce their tax burden. They benefit most by paying in the maximum annual amount. This is often not feasible due to financial constraints and can result in private pension shortfalls.

New legal situation

Paying into pillar 3a retroactively was not previously permitted. New legislation has now improved the situation: extra payments may be made to make up for missed or incomplete contributions – this will be possible for the first time from 2026 for the year 2025.

This does not apply to people who ­are already drawing pillar 3a assets, which is possible upon reaching the age of 60. Additional payments may not be made for years in which you did not earn a salary that was subject to OASI contributions.

Example scenario: a person pays just CHF 3000 into their pillar 3a account in 2025. Up to CHF 7258 is permitted (maximum amount for employees in the current year). This results in a shortfall of CHF 4258.

Under the new legislation, next year they could make an extra contribution of up to CHF 4258 for 2025 on top of their regular 3a contribution – and this amount would be able to be deducted from their taxable income in their 2026 tax return.

If a person contributed less than the maximum amount in 2026 too, they could make up the shortfall from the two previous years together in 2027.

Retroactive payments can go back ten years

Important: If you wish to make additional payments, you must first pay the maximum amount into pillar 3a in the year in which you would like to make the extra contributions. Retroactive payments may be made for a maximum of the previous ten contribution years. This means that anyone who fails to make the full or any payments into pillar 3a in 2025 has until 2035 to do so.

There are various benefits to making additional payments into pillar 3a: firstly, the paid-in assets will grow, leading to a better retirement provision in the long term. The sooner the capital is paid into pillar 3a, the longer it benefits from the compound interest effect.

Secondly, making extra payments reduces your tax burden, as the contributions can be ­deducted from your taxable income.

Thirdly, additional payments allow for greater planning flexibility: pillar 3a account holders decide for themselves when and how much they wish to pay in retrospectively – small payments can be made over several years or larger amounts can be paid in, for example, after receiving an inheritance or bonus. If you have an irregular income or don't start making pillar 3a contributions until later in life, you can optimise your assets retrospectively.

Great tip:Make a note of your annual contributions to pillar 3a. ­This will make it easier to work out any extra payments required later on.

Isabelle von der Weid is a ­customer advisor at Migros Bank and a retirement planning expert.