PER, Swiss 3rd pillar and French life assurance: which solution for a cross-border worker?
The choice between the French PER, the Swiss 3rd pillar (A and B) and French life assurance depends on the cross-border worker's tax situation, the canton of employment, and their wealth objectives: optimising retirement, reducing tax, flexibility on savings, or passing on wealth.
Cross-border workers' tax status: Geneva vs other cantons
Geneva cross-border workers: tax withheld at source in the canton, with the possibility of quasi-resident status (if 90% of the household's income is taxed in Switzerland), which gives access to the tax deduction for the 3rd pillar (A or, more rarely, B).
Other Swiss cantons: income tax in France, no tax deduction on the 3rd pillar but a tax advantage on the way out, just as French life assurance gives entitlement to tax advantages on French soil. The Swiss 3rd pillar (A and B).
The Swiss 3rd pillar (A and B) for cross-border workers
Pillar 3a: available as a cross-border worker taxed in Geneva (quasi-resident), capped at CHF 7'258 (employee) or CHF 36'288 (self-employed). The funds can be released from age 60, when buying your main home, on becoming self-employed, on leaving Switzerland permanently, or in the event of disability or death.
Pillar 3b: more flexible, but with no tax deduction on the way in for most cross-border workers. It resembles free savings, in the form of life assurance in Liechtenstein.
Taxation on the way out: for pillar A, the capital paid out is taxed at 6.75% in France as retirement capital. For pillar B, the capital is taxed under French life assurance rules, if the contract is treated as equivalent (particularly in the case of a foreign contract such as a Liechtenstein one).
Investment universe: the Swiss 3rd pillar offers a wide investment choice (ETFs, equities, bonds, gold, and so on), high return potential and protection in the event of death or disability.
Suitable for all cross-border workers, even without a tax deduction, with the aim of preparing for a long-term project (children's studies, buying property) or for retirement.
The French PER (Plan Épargne Retraite)
The PER is aimed mainly at cross-border workers taxed in France. Payments made are deductible from taxable income, within the annual ceiling set by French law.
The funds are generally locked until retirement, with some exceptions (buying a main home, disability, death of a spouse, and so on).
On the way out, the taxation depends on the form chosen: pension or capital.
For a retiree resident in France, the capital portion is subject to income tax, while the gains generated are taxed under the flat-rate levy (PFU) of 30%.
Although the PER is attractive for the tax deduction on the way in, it remains more rigid than the 3rd pillar or life assurance. Its taxation on the way out can also be heavier, particularly for high earners.
French life assurance
Life assurance remains a particularly flexible solution and well suited to cross-border workers. Withdrawals can be made at any time, which makes it an excellent medium and long-term savings tool.
After eight years, the taxation becomes very favourable thanks to an annual allowance on gains of EUR 4'600 for a single person and EUR 9'200 for a couple, before the PFU of 24.7% applies.
In the event of death, the transfer also benefits from an allowance of EUR 152'500 per beneficiary before age 70, which makes it a complete wealth tool.
Life assurance suits cross-border workers taxed in Switzerland just as well as those taxed in France. It combines perfectly with a 3rd pillar or a PER to build a strategy balanced between return, tax and transfer.
For amounts above EUR 250'000, it is even possible to opt for Luxembourg life assurance, which offers better legal protection and greater investment freedom.
Comparison table of the solutions
| Pillar 3a | Pillar 3b | French PER | French life assurance | |
|---|---|---|---|---|
| Who it concerns | All cross-border workers, with an advantage for quasi-resident Geneva workers | All cross-border workers | Cross-border workers outside Geneva | All cross-border workers |
| Tax advantage on the way in | Yes, if quasi-resident in Geneva | Yes, if quasi-resident in Geneva | Yes, outside Geneva | No |
| Deduction ceiling | CHF 7'258 (employee), CHF 36'288 (self-employed) | Depending on household composition in Geneva | Depending on income / French annual ceiling | None |
| Availability of funds | Locked until retirement, or subject to conditions | Free withdrawals, at any time | Locked until retirement, or subject to conditions | Free withdrawals, at any time |
| Taxation on the way out | Taxed at source, then 6.75% in France | Advantage after 8 years (allowances + PFU) | PFU (30%) or income tax scale + social levies | Advantage after 8 years (allowances + PFU) |
| Investment universe | Bespoke: ETFs, equities, bonds, property, commodities | Bespoke: ETFs, equities, bonds, property, commodities | Bespoke: ETFs, equities, bonds, property, commodities | Bespoke: ETFs, equities, bonds, property, commodities, private equity, structured products |
Which solution should you choose for your situation?
Taxed in France: pillar 3a or 3b for its favourable taxation on the way out, the PER for the tax deduction, and French life assurance for flexibility.
Quasi-resident in Geneva: pillars 3a and 3b for the taxation on income, with French life assurance alongside for flexibility.
Security-focused profile: the Swiss 3rd pillar.
Return-focused profile: the Swiss 3rd pillar and French life assurance.
Flexibility: French life assurance allows adaptable management and withdrawals at any time.
Each solution has specific advantages depending on your tax status, your objectives and your investment horizon. By combining several arrangements, it is possible to optimise your retirement, your tax position and the transfer of your wealth.
Before choosing, it is essential to carry out a personalised analysis of your situation in order to identify the strategy best suited to your profile as a cross-border worker.
