Pillar 3a investment products: account, funds or ETF

1. Which investment products are there in Pillar 3a?

Two, in essence: the 3a account and pension funds. They are not opposites, however, but two ends of the same ladder. What separates them is the equity allocation, which in Pillar 3a ranges from zero to 95 percent.

The 3a account is therefore the bottom rung. It earns interest like a savings account. The interest rate is variable and can fall at any time, but your balance never drops.

Pension funds invest in equities, bonds and further asset classes. Providers also call them a securities solution. The higher the equity allocation, the more the value fluctuates and the greater the return potential becomes over long periods.

One calculation shows what the choice of rung means.

Sample calculation: A 30-year-old precision mechanic from Langenthal pays CHF 300 per month into Pillar 3a, for 35 years until retirement. In the end he has paid in CHF 126'000. On the 3a account at 0.3 percent interest this grows to around CHF 133'000. In a balanced pension fund with an assumed 4 percent return after fees it comes to around CHF 265'000, twice as much.

Compound interest does the work: at 4 percent, every franc of return earns a return of its own the following year. On the account the interest rate is too low for that.

How much pension capital builds up with your own figures is shown by the Pillar 3a calculator.

2. Which pension funds are there in Pillar 3a?

Actively managed and passive ones. The equity allocation says nothing yet about the management. That is the second decision. It sets the price:

Passive funds copy a market such as the SPI or the MSCI World and are therefore cheap. In Pillar 3a, providers mostly work with institutional index funds and less often with exchange-traded ETFs. For you this makes little difference, because you hold for decades anyway and do not trade continuously.

Active funds try to beat the market. That costs more and does not always work: the majority of actively managed investment funds perform worse than their benchmark over long periods once the fees are deducted. What counts is the return that remains. Over thirty years, half a percentage point in fees adds up to a five-figure sum.

Both management types exist for every equity allocation. A balanced fund with 45 percent equities can be run passively or actively, at twice the price.

Many of these funds are also available in sustainable variants that consider ecological and social criteria. The same fund type is offered by different 3a providers at different fees.

3. Conclusion: account, funds or ETF, what pays off?

It is not the product that decides, but your investment horizon. It determines how much fluctuation you can afford. From that follows the equity allocation and with it your investment strategy.

As a rule of thumb:

• Under 10 years or no tolerance for fluctuations: 3a account
• 10 to 15 years: defensive pension fund with around 25 percent equities
• Over 15 years: balanced to equity-focused pension fund, 45 to 95 percent equities

How far up the ladder you go is one question. The other: whether that fund runs passively as an index fund or ETF, or is actively managed. It decides the cost, not the risk.

Whether securities suit you is not decided by the final capital on paper, however, but by the question of whether you can sit out a 20 percent decline without selling.

Three factors therefore decide your final capital: the investment period, the equity allocation and the costs. You set the first two with the choice of product. The third with the choice of provider.

This article was first published on 05/05/2026