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Pensions
When the pension rights adjustment falls away
The pension rights adjustment runs automatically, but not without exception. Four routes lead past it, and one of them presupposes that somebody takes action of their own accord. This article sorts the exceptions and says what a waiver means decades later.
Karcher Rechtsanwälte in Frankfurt am Main, Germany, focusing on uncontested divorce and international family law. Advice in German, English and Spanish.
Part of our guide Pension rights adjustmentThe 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 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.
Three exceptions come of their own accord. For the fourth you have to file an application.
First exception: a short marriage, only on application
Where the marriage lasted up to three years, the 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 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 adjustment 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.
- Recognized: a gross breach of the duty of maintenance towards a spouse or children over many years; serious criminal offences 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 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 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 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 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 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.
Whether one of the four exceptions applies depends on the duration of the marriage, on the entitlements and on your specific pension position. A waiver hits your provision in old age directly and can hardly be corrected later. We examine that before the signature, not after it.
Attorney at law · focus on family law
Admitted since 2010, more than fifteen years of experience in advising and representation. The contact for new instructions at Karcher Rechtsanwälte in Frankfurt-Gallus.
Legal notice: This article is provided for general information and does not replace legal advice in an individual case. Any laws, deadlines and amounts mentioned reflect the state of affairs at the time of publication and may change. A binding assessment requires a personal consultation.