Subsequent redemptions in the 3rd pillar possible from January 1, 2025

From January 1, 2025, it will be possible to fill contribution gaps in pillar 3a through subsequent purchases. The Federal Council took this decision on Wednesday following a consultation procedure.

People exercising a gainful activity in Switzerland who have not been able to pay the maximum contributions authorized in their pillar 3a each year will thus have the possibility of paying these contributions retroactively for ten years at most and of deducting these redemptions from their taxable income, written the government in a press release. Parliament had asked him to act in this direction.

A redemption in pillar 3a up to the “small contribution” (i.e. 7,258 francs in 2025) will be authorized each year, in addition to the ordinary contribution. To be able to make a purchase, a person must have received income subject to AVS in Switzerland, during the year for which they intend to pay contributions retroactively.

She must also fulfill this condition during the year in which she makes the redemption and have paid the entire ordinary contribution for the year in question. The redemption amount will be fully deductible from taxable income, in the same way as the ordinary annual contribution.

Financial consequences

According to an initial estimate, the new provisions will cause a reduction in tax revenue of around 100 to 150 million francs for direct federal tax, including 21.2 million for the cantons and 78.8 million for the Confederation. Concerning cantonal and municipal income taxes, the drop in revenue is estimated between 200 and 450 million francs per year.

The left and the Swiss Trade Union Union have already denounced a tax gift to the richest.

Independently, the Federal Council decided in September to review the preferential taxation of the 2nd and 3rd pillars, based on the recommendations of the group of experts responsible for reviewing federal tasks and subsidies. The Federal Council will probably present at the end of January the terms of the future tax treatment of capital withdrawals from the 3rd pillar as part of the consultation project on the review of tasks and subsidies.

nipa, ats