When the pension rights adjustment falls away

The standard case that everything is measured against

Whatever both spouses built up in pension entitlements during the marriage is divided in half on divorce: automatically, without an application, without any action on your part (§ 1 VersAusglG). The Familiengericht (family court) carries the adjustment out of its own motion as part of the divorce proceedings.

There are four departures from that standard case. The court examines three of them itself. One it does not.

First exception: a short marriage, only on application

Where the marriage lasted up to three years, the Versorgungsausgleich (pension rights adjustment) takes place only where one spouse expressly applies for it (§ 3 (3) VersAusglG). Where nobody files that application, it is omitted, and that applies even where one of the two built up considerably more.

What is counted is the duration of the marriage in the statutory sense: from the first day of the month of the wedding to the last day of the month before the Scheidungsantrag (divorce application) is served. A few weeks can therefore decide whether the three-year limit is exceeded.

This is the one exception in which passivity works against the very person who would benefit. Anyone who took a career break in a short marriage because of a child should therefore file the application deliberately rather than wait.

Second exception: minor value, where the effort is not worth it

Where individual entitlements or the differences in value between entitlements of the same kind are only small, the court should exclude them from the adjustment (§ 18 VersAusglG). The thinking is practical: for very small amounts the administrative effort of a division is not worth it, and that goes for everyone involved, including the pension providers.

The statute distinguishes two cases. In the first, two entitlements of the same kind face each other whose equalization values hardly differ; then neither is divided. In the second, an individual entitlement has a very small equalization value; then it stays out of it.

The relevant value threshold is tied to the reference figure in social insurance and changes annually. The pension rights calculator marks entitlements that fall below it.

What matters is the little word “should”: the court has discretion. It can divide even a minor entitlement where that matters in the individual case.

Third exception: gross inequity

Exceptionally, the adjustment does not take place in so far as it would be grossly inequitable (§ 27 VersAusglG). That provision is cited more often than it is applied; the hurdle is high, and mere dissatisfaction with the result is not enough.

What comes into question and what does not

• Recognized: a gross breach of the duty of maintenance towards a spouse or children over many years; serious criminal offenses against the other; the deliberate manipulation of entitlements.
• Not sufficient: that one spouse did not work during the marriage; that the separation came from one side; that the financial position is felt to be unfair.

An unusually long period of separation before the divorce can be added to that, but on its own it is not enough. And the provision works only “in so far as”: frequently the adjustment is not excluded entirely but reduced.

Fourth exception: the agreement, the route that stands open

The practically most frequent route is agreement. Spouses can exclude the Versorgungsausgleich (pension rights adjustment) entirely, limit it to individual entitlements or settle it differently (§ 6 VersAusglG): in a prenuptial agreement before or during the marriage, or in a divorce settlement agreement in the course of the separation.

Two hurdles have to be taken. The first is the form: recording by a notary or in the record of the court hearing (§ 7 VersAusglG). A privately signed arrangement is not enough.

The second is the review of content by the Familiengericht (family court) (§ 8 VersAusglG). What is examined is whether the agreement was valid when it was concluded and whether it is still fair today to rely on it. An exclusion that leaves one side without pension provision and without compensation frequently does not withstand that review, all the less so where it came about in a situation of structural imbalance.

What a waiver actually means

The Versorgungsausgleich (pension rights adjustment) does not concern a payment now but provision in old age. That is exactly what makes a waiver so inconspicuous: it does not hurt at the moment of signing and takes effect only decades later, on the pension notice.

Two considerations therefore belong before any signature. First: is there compensation somewhere else, in the Zugewinnausgleich (accrued gains), in the property, in maintenance? An exclusion without anything in return rarely does justice to both sides’ interests and withstands judicial review less well.

Second: the roles can reverse. Whoever has the larger entitlements today is not necessarily the one who is well provided for in fifteen years. A mutual exclusion looks symmetrical and economically almost never is.

What comes next

How the adjustment runs where it does take place, and why no money flows in the end, is set out under pension rights adjustment. Which entitlements are covered at all and how you state them completely is shown by filling in the questionnaire on the pension rights adjustment.

Where the adjustment is to become part of a larger package, it belongs in the divorce settlement agreement; there it can be combined with the Zugewinnausgleich (accrued gains) and maintenance into an overall solution. How that is settled in advance in a prenuptial agreement is dealt with by excluding or modifying the equalization of accrued gains by prenuptial agreement.