Running a business means dealing with clients, orders, liquidity, taxes and the continued development of the company. As a result, personal retirement planning can easily take a back seat.
However, for entrepreneurs and business owners in Switzerland, it is particularly important to take a closer look at retirement provision. Whether you operate as a sole proprietorship or through a limited liability company (GmbH) can make a significant difference.
A typical question we hear from clients is:
“Should I maximise my Pillar 3a contributions, join a pension fund, or make additional voluntary purchases into my pension fund?”
The answer depends on several factors, including the legal structure of the business, income, existing pension provision, tax situation and available liquidity.
Sole Proprietorship vs. GmbH: The Key Difference
If you operate a sole proprietorship, you are generally considered self-employed for social security purposes, provided that your self-employed status has been recognised by the relevant compensation office.
As a self-employed person, you are not automatically subject to mandatory occupational pension provision under the second pillar. However, you may choose to join a pension fund voluntarily.
The situation is different with a GmbH. A GmbH is a separate legal entity. If you work for your own GmbH and receive a salary, you are generally considered an employee of your company for social security purposes.
The corresponding rules on occupational pension provision therefore apply.
This distinction also directly affects how much you can contribute to Pillar 3a.
Pillar 3a: How Much Can Entrepreneurs Contribute in 2026?
The following maximum contributions apply for 2026:
If you are affiliated with a pension fund:
Maximum CHF 7,258 per year
If you are not affiliated with a pension fund:
Maximum 20% of your earned income, up to CHF 36,288 per year
This means that someone operating a sole proprietorship without a pension fund may be able to contribute significantly more to Pillar 3a, provided their income is sufficiently high.
By contrast, an entrepreneur who is employed by their own GmbH and affiliated with a pension fund can generally claim only the lower Pillar 3a maximum.
Pillar 3a contributions can be deducted from taxable income within the applicable legal limits. This allows you to build retirement assets while reducing your current taxable income.
When Can a Pension Fund Be Attractive?
As income increases, the question should not simply be:
“How much can I contribute to Pillar 3a this year?”
A more useful long-term question is:
“How should I structure my overall retirement provision?”
A pension fund can be attractive for self-employed individuals because, depending on the pension plan, it can provide not only retirement benefits but also insurance coverage in the event of disability or death.
In addition, if there is a pension gap, it may be possible to make voluntary purchases into the pension fund.
The amount that can be purchased cannot be determined using a general formula. It depends on factors such as the specific pension plan, previous pension history and the retirement assets already accumulated.
Your potential purchase amount is usually shown on your pension certificate or can be obtained directly from your pension fund.
Pension Fund Purchases and Taxes
A voluntary purchase into a pension fund can be attractive from a tax perspective.
In general, the amount paid into the pension fund can be deducted from taxable income.
Put simply:
Pension fund purchase → lower taxable income → potentially lower income tax
The immediate tax effect can be particularly relevant for individuals with higher taxable incomes.
However, a pension fund purchase should not be made solely because of the potential tax saving.
Once contributed, the funds form part of your restricted pension assets and are no longer freely available.
Before making a purchase, you should therefore consider your personal and business liquidity, planned investments, a possible property purchase and your long-term withdrawal strategy.
Practical Example: Sole Proprietorship or GmbH?
Let us take a simplified example of an entrepreneur with annual earned income or a relevant salary of CHF 120,000.
Option 1: Sole Proprietorship Without a Pension Fund
The entrepreneur is self-employed and is not affiliated with a pension fund.
20% of CHF 120,000 is:
CHF 24,000
The entrepreneur could therefore generally contribute up to CHF 24,000 per year to Pillar 3a.
Within the applicable legal requirements, this amount can be deducted from taxable income.
Option 2: Own GmbH With a Pension Fund
The entrepreneur is employed by their own GmbH and is affiliated with a pension fund through the company.
In this case, the maximum ordinary Pillar 3a contribution for 2026 is:
CHF 7,258
At the same time, contributions are being made to the pension fund, building up retirement assets within the second pillar.
If there is an additional pension gap, voluntary purchases may also be possible depending on the pension plan.
For this reason, it would be misleading to assume that the option allowing the higher Pillar 3a contribution is automatically the more attractive solution.
What matters is the overall combination of pension fund benefits, Pillar 3a, taxes, risk protection and available liquidity.
New Since 2026: Certain Missed Pillar 3a Contributions Can Be Made Up
Since 2026, it has been possible under certain conditions to make up contribution gaps in Pillar 3a retrospectively.
In principle, contribution gaps can be made up for up to ten years. However, only gaps that arose from 2025 onwards are eligible.
This means that in 2026, a contribution gap from 2025 can be made up for the first time.
There is an important condition: the ordinary maximum Pillar 3a contribution for the current year must first be paid in full. Only then can an additional contribution be made to cover a previous contribution gap.
The retrospective purchase is limited per year to the so-called small Pillar 3a contribution. In 2026, this amounts to CHF 7,258. This limit also applies to individuals who are not affiliated with a pension fund.
This new option can be particularly relevant for entrepreneurs whose income fluctuates from year to year.
What Should Entrepreneurs Pay Particular Attention To?
Retirement planning should not simply be about contributing as much money as possible every year. Several factors should be considered together.
Business liquidity:
Funds contributed to Pillar 3a or a pension fund are generally tied up for the long term. A tax saving is of limited benefit if the business subsequently lacks liquidity for investments, operating expenses or private obligations.
Legal structure:
A sole proprietorship and a GmbH are treated differently for social security purposes. This directly affects the options available under the second and third pillars.
Pension fund plan:
Not all pension funds offer the same benefits, savings contributions or purchase opportunities. Entrepreneurs should therefore consider the pension plan as a whole rather than focusing only on the ongoing contributions.
Potential pension fund purchases:
Before making a voluntary purchase, it is important to determine the actual pension gap and assess whether the purchase fits into your broader financial planning.
Planned capital withdrawals:
Anyone making voluntary pension fund purchases who intends to withdraw pension assets as capital at a later stage should take the applicable tax and pension rules into account at an early stage. Contributions and future withdrawals should therefore be planned together.
Tax progression:
Making the largest possible pension fund purchase in a single year is not automatically the most tax-efficient approach. Depending on your income, canton of residence and personal circumstances, it may be worth spreading available pension fund purchases across several tax years.
Investment strategy:
It is also worth considering how your Pillar 3a assets are invested. With a longer investment horizon, securities-based Pillar 3a solutions may be an alternative to a traditional Pillar 3a savings account.
Conclusion: It Is Not Pillar 3a or a Pension Fund – It Is About the Overall Strategy
There is no single retirement solution that is right for every entrepreneur.
For someone operating a sole proprietorship without a pension fund, Pillar 3a can be an important instrument for long-term retirement and tax planning, with a maximum contribution of up to CHF 36,288 per year in 2026.
For an entrepreneur operating through a GmbH, the pension fund plays a much greater role. In addition to the annual Pillar 3a contribution, the structure of the pension plan and potential voluntary pension fund purchases can be particularly relevant.
The key question is therefore not which individual instrument offers the largest short-term tax saving.
A more useful question is:
How can your pension fund, Pillar 3a, private investments, taxes and business liquidity be coordinated effectively?
Planning these elements at an early stage can help you build your retirement provision systematically while making appropriate use of the available tax planning opportunities.
The most suitable solution will always depend on the individual circumstances. Income, legal structure, canton of residence, existing pension assets, the pension fund regulations, planned capital withdrawals and personal liquidity can all significantly affect the outcome. The figures and examples above are therefore for general information and do not replace individual pension or tax advice.
Carlino Trust will be happy to help you analyse your personal pension and tax situation and coordinate Pillar 3a, your pension fund and other retirement planning options in a way that suits your individual circumstances.