3rd pillar and married couples: The complete guide

These days, many people hesitate between marriage and cohabitation. It's true that each of these two solutions offers several advantages, particularly in financial terms. But what about the Swiss personal pension system? Are there any major differences between a 3rd pillar for a married couple or for two cohabitants? Is it better to take out a 3A pension contract with a bank or 3B with an insurance company? Here are some of the answers.

In order to establish rules for the management of a married couple's assets and pension provision, three types of matrimonial property regimes exist in Switzerland.

The participation aux acquêts represents the basic regime, the one for which the couple did not have to sign a marriage contract. If they were to divorce, they would have to share the assets they may have acquired during their years of marriage, with the exception of their personal effects. Since the 3rd pillar is considered an asset acquired during the union, the amount will also have to be shared, unless the pension contract was paid for with one of the spouses' money.

As far as the community of property regime is concerned, the rules for sharing a married couple's 3rd pillar in the event of divorce are fairly similar. Indeed, whether a pension contract is taken out with a bank or an insurance company in Switzerland, the sums saved during the marriage will have to be shared equally between each party.

Finally, separation of property is the regime chosen by a married couple who don't wish to share their personal or joint assets, or even their 3rd pillar.

You may be hesitating between marrying your partner or cohabiting. However, when it comes to retirement or taxes, whether you take out an individual provident contract with a bank or an insurance company, it remains the same in either case. So, if you're a married couple, the 3rd pillar 3A offers you the same tax advantages as if you're cohabiting. This is also valid with a 3rd pillar 3B placed in insurance.

Nevertheless, it's true that some elements may vary according to your personal situation. This is particularly the case when it comes to Swiss taxation. For example, a married couple has their income added together, which generally causes an increase in the tax rate, since this varies according to the money earned within the household.On the other hand, for a couple living together, the tax return is to be completed individually. Both spouses are therefore taxed separately on their income and wealth.

If a death were to occur within a married couple who had subscribed to a 3rd pillar 3A, the pension assets would be passed on to the surviving spouse. In fact, the latter has priority in the list of beneficiaries, followed by any children of the couple, then parents and brothers and sisters. On the other hand, in the case of a 3rd pillar 3B contract taken out with an insurance company, the beneficiaries can be freely chosen by the insured.

In the case of a cohabiting couple, where one of the spouses dies, it is also possible that the surviving partner could be the main beneficiary if at least one of these conditions is met:

In summary, taking out a 3rd pillar in Switzerland for a married couple still seems more advantageous than in the case of a cohabiting regime, especially as regards inheritance law. This conclusion applies equally to a personal pension contract signed with a bank or an insurance company. If you would like further clarification on any of the points raised in this article, please contact your financial advisor.