Pillar 3b: Everything you need to know about flexible retirement savings (2026)
Pillar 3b is a private savings solution in Switzerland, which complements the first two pillars of the pension system.
Flexible and driven, it allows for free savings for retirement, wealth accumulation, or the financial protection of one's loved ones, without the strict restrictions of pillar 3a.
Pillar 3b offers a flexible and advantageous retirement savings solution in Switzerland. Discover how Invexa supports you in structuring savings tailored to your life goals.
Pillar 3b at a glance
- Pillar 3b allows tosave freely with no annual maximum amount, nor age restriction for withdrawal.
- Imposition: Pillar 3b assets must be declared in the tax return and are taken into account for the calculation ofwealth tax.
- The beneficiaries in case of death can be freely designated
- Pillar 3b can be used for various purposes: retirement savings, project financing, voluntary savings, risk coverage (disability, death), etc.
Diagram: The role of pillar 3b in the Swiss pension system
Pillar 3a or Pillar 3b?
Here are the main differences between pillar 3a and pillar 3b:
| Criterion | Pillar 3a (tied): | Pillar 3b (unrestricted): |
|---|---|---|
| Main purpose | Retirement savings | Free savings |
| Access | Active persons affiliated to the OAS | Open to all |
| Tax advantage | Deductible from taxable income up to maximum amounts | Non-deductible (except life insurance Geneva and Fribourg) |
| Withdrawal condition | Limited to certain cases: retirement, housing purchase, independence, leaving Switzerland | Withdrawal possible at any time |
| Normal retirement age | No earlier than 5 years before the standard retirement age | Anytime |
| Taxation | Upon withdrawal (lump-sum benefits, reduced rate) | During the contract (wealth tax), exempt payment if conditions are met |
| Possible shapes | Bank account, funds, endowment life insurance | Traditional savings, investments, life insurance, annuities, funds, real estate |
| Transfer in the event of death | Statutory beneficiaries, strict order | Free beneficiaries |
Pillar 3b in Geneva
In Geneva, Pillar 3b is a particularly attractive tax tool, yet it is less well known than its counterpart, Pillar 3a.
Its main difference is that it is not locked up until retirement. You retain flexibility in accessing your capital, making it a tool that serves both wealth-building and tax-planning purposes.
Pillar 3b life insurance premiums paid are deductible from taxable income (line 52.11, "Income" column) as follows in 2026:
3b deductions for single person
- 2,345 CHF per year for a single person
- 4,690 CHF for a person without a 2nd pillar or a 3a pillar
3b deductions for couples
- 3,518 CHF for a married couple
- 5,277 CHF if one of the two does not contribute to the 2nd pillar or the 3a pillar
- 7,036 CHF if neither of them contributes to a 2nd or a 3a pillar
Additional deductions for children
- +959 CHF for parents who affiliated to a pension fund
- +1,350 CHF if one of the two doesn't contributes to either a 2nd pillar or a 3a pillar
- +CHF 1,800 if neither of them contributes to a 2nd pillar or a pillar 3a plan
These deductions are an advantage specific to the canton of Geneva, which doesn't apply in most other Swiss cantons.
To be tax-deductible, a Pillar 3b account must take the form of a life insurance policy. This may seem restrictive, but in practice, there are investment fund contracts that allow you to invest up to 100% in stocks, funds, or ETFs.
This allows you to combine insurance protection with long-term growth potential. This type of policy is attractive for the long term, particularly in the context of retirement savings.
Sources:
Art. 31, rsGE D 3 08: Law on the Taxation of Individuals (LIPP)
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Tax Benefits of Pillar 3b
Although contributions to the 3b pillar are not encouraged to the same extent as those to the 3a pillar through federal tax deductions, the 3b pillar nevertheless offers several tax advantages.
Capital exempt from tax upon withdrawal
The payout of Pillar 3b capital (including surpluses and returns) is exempt from tax on lump-sum benefits upon withdrawal.
Under Art. 20 DFTA, in the case of a single-premium policy (insurance), it's also exempt from tax if it meets the requirements of genuine retirement provision. That is:
- The duration of the contract must be 5 years (10 years if linked to funds)
- The payment takes place after 60 years of age
- The contract was entered into before the age of 66
- The policyholder and the insured person are the same person
Taxation of annuities
Since January 1, 2025, life annuities taken out under Pillar 3b are subject to income tax on only 4% of the payout (down from 40% in 2024).
Surplus participation, however, is taxed on 70% of its amount (income tax).
Tax Deductions
Cantons set the amounts of annual contributions that are tax-deductible. In some cantons, Pillar 3b contributions aren't deductible at all, whereas in the canton of Geneva, it's possible to deduct up to CHF 2,345 for a single person in 2026.
In the canton of Fribourg, the following deductions are available:
- CHF 750 for a single person
- CHF 1,500 for a married couple
- These deductions apply only when you open a Pillar 3b account in insurance, not in a bank.
What Tax Applies to Pillar 3b Capital?
Pillar 3b capital is subject to wealth tax for the entire duration of the contract. Wealth is taxed above a certain threshold, which depends on the canton. In Geneva, wealth tax applies starting at CHF 87,632, whereas in the canton of Vaud, it starts at CHF 58,000.
Pillar 3b: Who Is It For?
The 3rd pillar B can be adapted to the following profiles:
- Individuals who have contributed the legal maximum to Pillar 3a
- Those looking for complete flexibility regarding amounts, payment methods, and withdrawals
- Anyone who wants to save for after retirement
- Anyone who wants to save for after retirement
- People without income who are subject to the AVS
Where Can I Open a Pillar 3b Account?
You can open a Pillar 3b account either through insurance (with a tax deduction in Geneva and Fribourg) or with a financial institution (without a tax deduction). The decision will depend on your needs (protecting loved ones, retirement savings, returns, etc.).
What Pillar 3b Solutions Exist?
Several options exist depending on your goals. Single-premium annuities let you pay in a lump sum and then receive a guaranteed lifetime income — ideal if you want to secure supplementary retirement income without worrying about market swings. Contracts with recurring premiums, by contrast, give you the flexibility to spread your payments over several years while gradually building up capital.
For those seeking more growth potential, market-linked solutions (investment funds, dedicated securities accounts, or unit-linked contracts) let you expose your savings to equities, bonds, or ETFs, offering higher return potential but also exposing your capital to fluctuation. Finally, hybrid life insurance products combine a protection component (guaranteed capital) with an investment component (variable-return funds), striking a balance between security and performance. The right choice depends on your time horizon, risk tolerance, and liquidity needs.
Table of Possible Solutions in 3b
| Bank | Assurance |
|---|---|
| Investment Funds | Life annuities |
| ETFs, index funds | Income Plan |
| Miscellaneous Securities Account | Single-Premium Investment |
| Structured Products | Fund- or ETF-linked universal life insurance |
| Savings Accounts | Life insurance or loss of earnings capacity |
| Obligations | |
| Etc. |
How Does Inheritance Work for a Pillar 3b Account?
Beneficiary clause in Pillar 3b
Thanks to the beneficiary clause in a Pillar 3b insurance policy, the assets are paid directly to the designated beneficiaries — whether defined by law or by the clause itself — without passing through the estate. In practice, the capital is transferred to the beneficiaries without delay, independent of the ordinary division of the estate.
This mechanism does, however, come with an important legal limitation to be aware of: the surrender value of a Pillar 3b insurance policy — a mixed life insurance policy, for example — can be factored into the calculation of forced heirship shares. If the forced heirs (children, spouse, or parents, depending on the situation) believe their minimum entitlement hasn't been respected, they have a legal remedy: an action for abatement. In this case, it isn't the insurer who is held liable, but the designated beneficiary, who must compensate the affected heirs up to the amount of the surrender value.
Pure risk insurance
The situation is different for the pure risk insurance, i.e. death or disability cover without surrender value.
In this case, the benefit paid is generally not subject to reduction: the beneficiary receives the full amount of the death benefit, and the heirs have no right to contest it.
What Happens to My Pillar 3b in the Event of a Divorce?
In the event of a divorce, the 3rd pillar is part of the couple's heritage.
Savings accumulated during the marriage are generally divided, while assets acquired before the marriage or received through an inheritance remain separate. The division depends on the matrimonial property regime: participation in acquisitions, community property, or separate property. An agreement or divorce settlement may modify the terms as long as they remain equitable.
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Taking out a Pillar 3b requires careful thought, since it's a flexible solution whose features vary significantly from one provider to another. Before subscribing, it's essential to compare your options and assess your financial profile, your goals, and your risk tolerance to identify the solution best suited to you.
The returns, fees and guarantees can vary significantly from one contract to another and influence the overall performance of your savings over the long term.
Frequently Asked Questions
What is pillar 3b (free provident insurance)?
Pillar 3b is unrestricted retirement savings in Switzerland, part of the 3rd pillar.
Unlike Pillar 3a, it has no contribution cap, allows withdrawals at any time, and offers free choice of beneficiaries. You can invest in a range of products: life insurance, savings accounts, funds, or real estate. Tax deductions are limited, but withdrawals are tax-exempt.
How many pillar 3b contracts can a married couple hold?
Each spouse is free to take out one or several Pillar 3b contracts; there's no regulatory limit per person or per household.
As a cross-border worker, do I need to report my Pillar 3b to the French tax authorities?
Yes. Capital and gains must be reported on your French tax return if they generate taxable income or are included in the calculation of the IFI, but they are not deductible.
Can I buy real estate with my Pillar 3b account?
Yes, it's possible to buy real estate using Pillar 3b.
Can I freely withdraw the money invested in a 3b pillar?
If the contract allows it, you can withdraw your funds at any time.
This makes it a well-suited tool for early retirement.
Please note, however, that in insurance, if you terminate the policy before its maturity date, the surrender value may be less than the premiums paid.
What is the difference between a Pillar 3a and a Pillar 3b?
The Pillar 3a is capped, tax-deductible in Switzerland, and withdrawals are subject to strict conditions.
The Pillar 3b has no contribution limit or automatic tax benefit (except in Fribourg and Geneva), and withdrawals and contributions are completely unrestricted. In addition, there is a wider range of investment options.
Is pillar 3b tax-deductible?
Generally, Pillar 3b is not deductible from direct federal tax.
Unlike pillar 3a, there is no federal deduction ceiling.
However, some cantons provide deductions, including the cantons of Geneva and Fribourg, under certain conditions and up to specific limits.
It is therefore essential to check the tax rules in your canton of residence.
Is Pillar 3b attractive in Geneva?
Yes, pillar 3b can be more interesting in Geneva than in other cantons, because a specific cantonal tax deduction exists (2,345 CHF for a single person).
Furthermore, if the provident conditions are met, the withdrawal is tax-exempt (unlike pillar 3a, which is mandatory). This therefore makes it an excellent tax optimization tool in Geneva.
Insurance or bank for a pillar 3b?
There are no cantonal tax deductions for Pillar 3b accounts held at banks. However, the latter offers great flexibility, high liquidity, and lower fees in the short term.
A Pillar 3b taken out through life insurance includes death or disability coverage and enforces savings discipline. It's flexible but isn't well suited to short-term needs, since fees are charged upfront at the start of the contract (rather than annually, as with a bank solution). Insurance-based Pillar 3b is better suited to retirement savings, although it's possible to make withdrawals partway through the contract.
Claire Fivaz
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