Pension Rights Equalisation in Germany

Implementation of Pension Rights Equalisation

The Family Court is responsible for implementing the equalisation of pension rights. In principle, §1 VersAusglG provides for the even division of all rights acquired during the marriage as a starting point. This law only covers the rights acquired during the marriage because it is viewed that a mutual pension community exists between the spouses during the marriage. Per §5(2) VersAusglC, the question of which rights exist and how much these rights equate to during the marriage can only be determined at the end it.

In order to facilitate implementation of pension rights equalisation, both spouses are obliged to provide each other with information on entitlements acquired during the marriage period (§4 VersAusglG). The Pension Equalisation Act generally assumes that an internal division of pension rights has already occurred §9(2) VersAusglG. This is only different if an external division has been agreed beforehand or if the pension provider of the person liable for settlement demands an external division.

In the case of internal dividing, the pension institution from which the spouse liable to pay compensation has acquired rights or entitlements is also the pension institution with which half of the internal division takes place. Thus, spouse A is granted the pension institution’s respective compensation claims from which spouse B has acquired rights or entitlements. The competent family court issues instructions to this effect. It should be noted that half of the entitlements may be due to costs incurred by the pension institution for the person entitled to compensation (§13 VersAusglG).

One further factor that is very important in this context, is the fact that the information by the pension institution needs to be scrutinized.

Internal pension equalisation is the preferred route for reasons of simplicity. This is because, in the case of a settlement with only one insurance provider, the settlement entitlements do not have to be transferred individually, but are settled. In the case of external splitting of pension rights, on the other hand, equalisation takes place with different insurance providers.

Exceptions: Pension Rights Equalisation

However, there are exceptions where the pension rights are not balanced:

• For a marriage of up to three years: However, this is different if one spouse applies for pension rights  equalisation, §3(3) VersAusglG.
• The spouses have excluded a pension adjustment in a marriage contract: Under §7 VersAusglG, such an agreement must be notarised and, under §8(1) VersAusglG, it must be capable of withstanding a review of its content and exercise.
• In the case of minor settlement values (where the amounts dealt with are of little monetary value and where the difference regarding what is owed is of little amount), §18 VersAusglG.
• If the supply equalisation would be grossly unfair, §27 VersAusglG: this is always an individual case decision which requires legal consideration.

In addition, the pension adjustment can still be adjusted after it has been implemented by the Family Court if maintenance claims exist (§§33, 34 VersAusglG), if the person liable to pay the adjustment becomes disabled (§§35, 36 VersAusglG) or if the person entitled to adjustment dies (§§37, 38 VersAusglG).