When it comes to pillar 3a, many people talk about taxes. Surprisingly few talk about returns. Yet over the long term it is not the tax advantage that determines how much wealth is created, but the performance of the chosen investment.
Anyone who seriously uses pillar 3a as a pension solution should ask less whether they pay in, and more how their money works within the pillar.
Tax savings are one-off, returns work every year
The tax deductibility of pillar 3a is attractive. But it only takes effect in the year of the contribution. Returns, on the other hand, unfold their effect over decades.
A simplified example:
- Tax saving per year: a few thousand francs
- Investment horizon: 20 to 40 years
- Effect of performance: exponential through compound interest
Over the long term, the influence of the return exceeds the tax effect many times over. Anyone who focuses exclusively on taxes is optimising at the wrong end.
Savings account vs. funds: how big is the difference in return?
Many 3a balances still sit in savings accounts. That may feel safe, but from a return perspective it is problematic.
3a savings account
- Interest currently between 0 % and 1 % (as of 3 September 2026)
- After inflation, often little or nothing remains in real terms.
- Purchasing power barely grows over the years.
3a funds
- Investment in equities, bonds or mixed strategies
- higher fluctuations
- considerably better long-term return potential
The long-term benchmark is provided by the equity market itself: according to the Pictet long-term study, Swiss equities have returned an average of 6.8 % per year since 1900 (nominal, before costs). Over long periods, the capital market has been the most effective way to build real wealth. That also applies within pillar 3a.
Performance comes from structure, not luck
Good 3a performance is no accident. It depends on clearly identifiable factors:
- Equity share (= the portion of the fund’s assets in equities): the higher, the greater the long-term return potential.
- Costs: high fees eat performance, every year.
- Investment strategy: passive, active, rule-based or combined
- Discipline: staying the course in weak market phases
Short-term fluctuations are unavoidable. Over the long term, what counts is whether the structure is right.
Five-year returns: meaningful, but not everything
Many providers advertise historical returns. These figures are not irrelevant, but they need to be put into context.
Important to know:
- Past performance is no guarantee of the future.
- Short periods can distort.
- Only products with a similar strategy are comparable.
Nevertheless: anyone who systematically underperforms comparable solutions for years is sending a clear signal.
Costs: the invisible enemy of performance
Costs work quietly but constantly. One percentage point more in fees per year can amount to a six-figure sum over decades.
Pay attention to:
- Total expense ratio (TER = a fund’s total annual costs)
- Any additional costs at product level
- Fees for strategy adjustments
You must always look at performance after costs. Anything else is window dressing.
Risk is not a mistake — the wrong risk is
Many people avoid risk without defining what they mean by it. Yet risk in pillar 3a is not optional but inherent. What matters is:
- Does the risk match the investment horizon?
- Is it taken consciously?
- Is the strategy comprehensible?
Too little risk over decades can be just as harmful as too much at the wrong time.
Returns need time and patience
Pillar 3a is not a short-term investment tool. Anyone who changes strategy every year or reacts to every market correction sabotages their own performance.
Long-term success is based on:
- a clear strategy
- low costs
- a sufficient equity share
- consistently staying the course
Patience is not emotional advice but an economic advantage.
Conclusion: without performance, pillar 3a remains patchwork
Pillar 3a only unfolds its full potential if returns are taken seriously. Tax savings are a bonus, not the core. The highest-returning 3a solutions are almost exclusively offers with a very high equity share: on five-year performance, the best products in the Evaluno comparison lie between around 60 % and over 80 % (as of 30 June 2026). The comparison of 3a solutions gives a comprehensive overview of the Swiss offers.
The decisive questions are:
- How does your 3a money work in the capital market?
- What return do you achieve after costs?
- Is your solution competitive over the long term?
Anyone who can’t answer these questions gives away a large part of the opportunities that pillar 3a offers.
Note: Evaluno analyses the returns and performance of pillar 3a products on a data-driven and comparable basis. The aim is transparency, not marketing.
Legal disclaimer
Evaluno does not provide investment, legal or tax advice and is no substitute for personal advice.
