Maximum deductions 2024 for tied pension plan 3a and the remuneration and default interest for direct federal taxation

How much am I allowed to pay into my third pillar next year and what does the change in remuneration and default interest for direct federal tax mean for me?

Tied pension plan 3a

Last week, the Confederation announced the maximum deductions for the year 2024 of the tied pension plan 3a. Next year, this will again be CHF 7,056 for persons with a pension fund connection and CHF 35,280 or 20% of net annual income for persons without a connection.

As a rule, the 3a is advertised especially with the annual tax savings. The following is a brief example; the person is male, single, has a net income of CHF 80,000 per year and is non-denominational. The usual cantonal deductions are taken into account.

Own calculation

However, the third pillar is primarily an instrument for supplementing old-age provision in order to maintain a certain standard of living after the Retirement to enable. Even then, there are optimisation possibilities when planning. If you have paid all contributions into a single 3a fund over the years, you must withdraw this amount at once and cannot split it. When you withdraw it, you will be subject to capital tax, albeit at a lower rate. If you have distributed the saved amount over 3 or 4 accounts, you can stagger the withdrawal over several years and thus quickly save several thousand francs in addition.

However, there are other advantages of the third pillar when planning, such as early withdrawal for owner-occupied residential property.

If you start saving early, the long investment horizon offers the opportunity to invest these 3a funds in an investment vehicle rather than just paying them into the account, which often earns interest at a low rate.

Own calculation

The maximum possible 3a amount was intentionally not used for the calculation. This is because, as mentioned above, you should save in several pots and, depending on your needs and situation, already have other containers such as a 3a insurance policy or have a portion of the 3a funds reserved in another pot for the early withdrawal of a residential property. In the case of the latter, these funds should be exposed to no to few fluctuations, depending on the horizon.

What is suitable for your individual goals, needs and financial possibilities can best be determined with a holistic Financial planning assess. Financial planning means life planning.

You don't yet have a third pillar and are in the process of opening one, already have one or even several 3a accounts/policies and would like an independent assessment? We would be happy to support you in building up your old-age provision as well as in finding the best and most suitable solution for you. needs-oriented planning.

Have you already paid in the maximum amount for this year? It is worth making deposits, especially with the custody account variant, either spread over the year to benefit from different market rates or at the beginning of the year, as this allows your money to work longer.

Interest on refunds and arrears of direct federal tax

The Federal Interest Rate Ordinance stipulates that interest rates in the area of federal taxes are reviewed annually in order to adjust them to the current interest rate level if necessary. From 1 January 2024, the interest rate on arrears and the remuneration interest rate for refunds will be increased to 4.75% due to increased interest rates, which corresponds to an increase of 0.75% compared to the previous 4%. The remuneration interest rate for voluntary advance payments for direct federal tax increases to 1.25%, as opposed to the previous 0 per cent.

Due to these interest rate increases, the Confederation expects additional revenue of around CHF 30 million, while the cantons, due to their participation in direct federal tax and withholding tax, can expect estimated additional revenue of CHF 4 million. Some of this additional revenue will flow into the public budgets as early as 2024 and some in the coming years.

Compared to the past 4 years, it is now becoming more attractive again to pay taxes in advance. Taxes are one of the largest budget items in the Swiss household, along with third-party childcare. Planning ahead can help ensure that there are no surprises in the final tax bill. This is particularly important if you change jobs with a pay rise, change your workload or change your place of residence.

Are you about to change your place of residence? At www.finberg.ch you will find a helpful tax calculator with which you can map your situation individually and compare every municipality in Switzerland.

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