A divorce in 2021 or 2022 or will it be a contested divorce, what are the consequences for the pension in 2021 and 2022? What is the distribution of the accrued pension and how does this distribution of the pension work from July 1, 2022? You can also opt for conversion of the accrued pension, so that everyone gets their own pension pot. Also pay attention to the consequences of a divorce, your AOW and its division. So pay extra attention to the surviving dependants’ pension that you and your ex have built up, because it often involves a lot of money. Also in 2022. In the event of a divorce, you can divide this accrued pension between the two of you in several ways. Half of the pension can be yours, but you may also deviate from the rules in the Pension Rights Equalization Act. Arrange mutual agreements about pension division properly in a divorce agreement. From July 1, 2022, this will be distributed immediately by law.
- Division of pension: the Equalization of Pension Rights in the Event of Divorce Act and the pension division
- Divorce and the division of the accrued pension, making agreements and no contested divorce
- What pension can you divide in the event of a divorce?
- Pension Rights Equalization Act explained
- To whom does the Pension Rights Equalization Act apply?
- Living together, but not married and not a registered partnership
- Marriage and registered partnership
- How to divide the pension, conversion of pension?
- Death of an ex partner and pension
- What does the pension provider do in the event of a divorce?
- Alimony, spousal support and child support
- Distribution of pension as of July 1, 2022
- Finally, in the event of a divorce, make agreements about your pension and pension division, and thus prevent a contested divorce
Division of pension: the Equalization of Pension Rights in the Event of Divorce Act and the pension division
The Equalization of Pension Rights in the Event of Divorce Act states that the entitlements to an old-age pension accrued during the marriage or relationship must in principle be shared equally. After an 18-year marriage, 9 years of pension accrual would go to the ex-partner. In addition, until the moment of divorce, the accrued survivor’s pension goes to the ex-partner. But the law is not mandatory on this point. You may deviate from this by mutual agreement.
Divorce and the division of the accrued pension, making agreements and no contested divorce
Those who separate must arrange all kinds of matters properly. Whether it is a divorce, legal separation or termination of a registered partnership. For example, how will you deal with the children, the house, the contents and the pension from now on? And this article is about pension. It seems far away, but it isn’t. It is advisable to also arrange the division of the pension properly in the divorce agreement, the written agreement between ex-partners with a view to the divorce.
What pension can you divide in the event of a divorce?
Not intended are:
- An early pension until the state pension age or early retirement schemes;
- The AOW;
- A disability pension;
- A survivor’s benefit;
- A small pension;
- Annuity or a temporary pension.
The AOW is therefore determined individually and these rights are not divided. However, whether or not you no longer live together can have consequences for the amount of your state pension.
Pension Rights Equalization Act explained
The Pension Rights Equalization Act does regulate some things about the division of the old-age pension in the event of divorce. According to the law, both ex-partners are entitled to half of the old-age pension. We are then talking about the pension accrued in the years between the conclusion of the marriage or registered partnership and the separation or divorce. Anyone who lives together without a registered partnership cannot rely on this law. Early retirement, annuities and, for example, certain temporary pensions are also not covered by this law. The survivor’s pension is also not distributed in accordance with the Pension Rights Equalization Act. The amount that the pension provider should pay to the ex-partner has a certain lower limit and this lower limit is extra high if the ex lives abroad.
To whom does the Pension Rights Equalization Act apply?
The consequences of a divorce for your pension have been included in the law since 1995. The Pension Rights Equalization Act regulates this and applies to the following persons:
- Ex-spouses with a divorce on or after May 1, 1995;
- Ex-spouses legally separated on or after May 1, 1995. This means since April 1, 2001 that this divorce must be registered in the marriage register;
- Former registered partners whose registered partnership was definitively terminated after April 30, 1995.
Living together, but not married and not a registered partnership
If you live together, are not married and do not have a registered partnership, then nothing is arranged for you in the Pension Rights Equalization Act. You can make agreements with your ex about the division of your pension. Record the agreements with a notary. In this case, the pension fund does not pay a pension to the ex-partner.
Marriage and registered partnership
A registered partnership is equivalent to a marriage. In the event of a divorce, including a legal separation, you can divide the pension between yourself. If you marry someone else or enter into a registered partnership, this has no influence on the division of the pension. There are cases, for example, if the prenuptial agreement or partnership does not expressly exclude this.
How to divide the pension, conversion of pension?
There are four options for dividing the accrued pension in the event of a divorce:
1. The standard division of a pension
The standard division means that your ex-partner receives 50 percent of the pension accrued during the marriage or registered partnership. Both partners may have accrued a pension that is eligible for division. If you have both built up a pension, you can also decide not to agree on a division but to leave things as they are.
2. A different division in the event of divorce
The Pension Rights Equalization Act leaves you free to choose a different distribution of the pension. Consider a division of 30% and 70% or something else and you can also choose a different period to determine the pension rights. Record all this clearly in a divorce agreement.
3. Converting into a pension right, conversion of pension
You and your ex-partner can choose to convert the right to an old-age pension or supplementary partner’s pension into a pension right through conversion, so that your partner will have his or her own right to a pension as soon as he or she turns 65. An advantage of this division is that the bond between the ex-partners is permanently broken. Moreover, with conversion you will also receive your pension if your partner dies before retirement. On the other hand, if you die before you retire, your ex will not get back 50% of the pension entitlements.
4. Divide the cash value
Finally, you can choose to divide the cash value of the accrued old-age pension directly, so that it forms part of the financial division of the estate in the event of a divorce and is not debited to your pension. In other words: you actually buy off the reduction in your pension by paying a certain lump sum to your ex.
Death of an ex partner and pension
If someone dies, the state pension is stopped. If the deceased lived together, the age of the partner determines the consequences for the benefit. If the person concerned is younger than 65 years of age, an Anw benefit may be available; if the person concerned is entitled to AOW, the AOW will change to the higher AOW benefit for a single person. If your ex-partner who has accrued the pension dies after a divorce, you as the surviving ex-partner will not receive part of the old-age pension back. On the other hand, if the ex-partner who has not accrued the pension himself dies, you will receive the full old-age pension back if no conversion was applied during the divorce. The conversion cannot be reversed.
What does the pension provider do in the event of a divorce?
The pension provider does not always pay out, for example:
- If the appropriate form has not been received by the pension provider within two years after the divorce.
- As payment through a prenuptial agreement, partnership agreement or separation agreement.
The pension provider may charge costs for implementation. The benefit is net, not gross.
Alimony, spousal support and child support
There are many rules for paying and receiving alimony plus the tax consequences. There are also tax rules for the deduction of spousal support. Child support is no longer deductible as a deduction for child support costs.
Distribution of pension as of July 1, 2022
From July 1, 2022, you will have your own entitlement to a pension and you will therefore no longer be linked for life to a partner who transfers pension funds to you. The entitlement is equal to half of the old-age pension and the partner’s pension accrued during the marital period. The pension accrued before the marriage is not part of this. Your entitlement will be automatically distributed from July 1, 2022, as soon as the pension providers receive notice of a divorce from the Personal Records Database (BRP).
Finally, in the event of a divorce, make agreements about your pension and pension division, and thus prevent a contested divorce
In the event of a divorce and division of pension, always check with the pension fund or pension provider how much pension has been accrued and whether any measures may need to be taken. So you know where you stand and what you have to do.
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