The Federal Council has proposed changes to the ordinance for consultation, which will last until March 6th, 2024, to allow gaps in tax-privileged private pension provision (pillar 3a) to be closed through subsequent purchases. This proposal is based on a motion by Council of States member Erich Ettlin from 2019 but differs significantly from it in parts. Supporters of Pillar 3a purchases are disappointed with the changes, while critics continue to question the sense of such subsequent payments.
According to the Federal Council’s proposal, certain conditions should apply. Erich Ettlin, a member of the Council of States, has received feedback from citizens expressing disappointment over the limitations of the proposed changes. Critics argue that the Federal Council is overly cautious due to fears of tax losses, while supporters believe that saving for retirement in Pillar 3a is important for financial independence in old age.
The Swiss Pension Association (VVS) also criticizes the proposal for being too complicated and administratively expensive. The VVS believes the Federal Council’s model does not provide enough flexibility for individuals to make retroactive payments for previous years, thus limiting the potential benefits of Pillar 3a purchases. Additionally, the requirement to prove an income subject to AHV for the year of purchase poses challenges for certain individuals.
Despite surveys showing that many people have gaps in their Pillar 3a contributions, there is criticism that the proposal primarily benefits those with high incomes and may lead to tax losses. Some argue that the proposal creates competition between the second and third pillars, potentially undermining occupational pension provision. Erich Ettlin believes that his motion for Pillar 3a purchases is intended to support the middle class, particularly those who may have sacrificed career opportunities for family responsibilities.
In conclusion, while the proposal aims to address gaps in private pension provision, there are concerns about its complexity and limitations. Critics argue that it favors higher-income individuals and could lead to tax revenue losses while supporters believe it is an important step towards financial independence in retirement.
The Federal Council has introduced changes to an ordinance on consultation regarding gap closing through subsequent purchases under pillar IIIb private pension scheme (Pillar 3A). These changes were originally proposed by Councilor Erich Ettlin in a motion from 2019 but differ significantly from it.
Supporters of pillar IIIb purchases feel disappointed with these modifications while critics continue their questions about making such additional payments.
The Federal Council suggests some conditions should apply before any gap closing can take place under pillar IIIb scheme.
Councilor Erich Ettlin has received feedback from citizens indicating dissatisfaction with these restrictions.
Critics say federal council’s caution stems from fear of revenue loss while supporters think saving money during retirement years crucial.
Swiss Pension Association (VVS) believes this model too complex and expensive administratively as well as inflexible when it comes retroactive payments.
They also challenge requirement proofing income subjected AHV year purchase made poses challenges for some people.
Despite surveys showing many people lack contribution under pillar IIIb scheme; criticism arises mainly due its impact on high-income groups potential tax loss as well as competition between second and third pillars affecting occupational pensions provision.
