Pension equalisation after retirement: What happens if the pension starts during the divorce?

If there is a divorce, the spouses' pension fund assets acquired during the marriage are equalised (Art. 22a FZG and Art. 123 ZGB). For this purpose, the termination benefit is determined for each spouse on the date of marriage and the date on which divorce proceedings are initiated. The difference, i.e. the pension assets saved during the marriage, is compared and divided equally. The spouse with the lower or no pension assets receives an equalisation payment from the other spouse (so-called pension equalisation). The same applies to the dissolution of a registered partnership. This process ensures that the pension benefits accrued during the marriage or registered partnership are divided fairly between the partners in order to provide financial security for both in old age.

It becomes more complicated if one spouse reaches the reference age (age 65) during the ongoing divorce proceedings or takes early retirement. In this case, the spouse concerned will receive a retirement pension from their pension fund. The relevant date for determining the amount of the retirement assets is the date of (early) retirement. This is irrespective of the fact that the retirement took place during pending divorce proceedings (see BGE 151 V 144). The retirement pension is therefore calculated on the entire, undivided retirement assets. Only after the divorce decree has become final is the pension equalisation carried out and the pension to be paid out in future is recalculated on the reduced capital basis.

As retirement occurred before the pension equalisation, the spouse's pension fund paid out too much pension for the period between the start of retirement and the divorce decree. This is where Art. 19g FZV comes into play. This allows the pension fund to compensate for the overpayment by reducing the retirement pension to be paid in future and the capital to be transferred to the other spouse. The maximum reduction corresponds to the amount that was overpaid in pension during the divorce proceedings and is divided equally between the two spouses.

Example:

Both spouses are gainfully employed when the divorce proceedings are initiated. The husband is 64 years old at this time and has pension assets of CHF 750,000. One year later, he reaches normal retirement age; his assets now amount to CHF 800,000. Based on the regulatory conversion rate of 5%, he receives an annual retirement pension of CHF 40,000.

The divorce proceedings drag on for a total of three years until the judgement becomes final. The court orders the husband's pension fund to transfer CHF 300,000 to the wife or to her pension or vested benefits institution. This reduces the man's pension assets to CHF 500,000. The pension fund calculates a future retirement pension of CHF 25,000 (500,000 x 5%) based on the reduced capital. As a result of the pension equalisation, the husband's retirement pension is permanently reduced by CHF 15,000 per year to CHF 25,000.

During the two years between the start of the pension and the divorce decree, the pension fund paid the man CHF 15,000 too much pension per year, i.e. a total of CHF 30,000. This amount is subsequently divided equally between the spouses: The wife therefore does not receive CHF 200,000, but only CHF 185,000 from the pension equalisation. At the same time, the husband's retirement pension is also reduced. The relevant factors for the reduction are the husband's age (67) and the conversion rate at the time of the reduction (6%).

The additional reduction amounts to CHF 900 per year (15,000 x 6%). After the pension equalisation has been carried out, the man's annual retirement pension therefore amounts to CHF 24,600 (40,000 - 15,000 - 900).

This example illustrates that a divorce at retirement age can have a direct and lasting impact on retirement provision. The decisive factor here is not only the amount of the pension assets, but also the timing of the divorce: whether the proceedings are initiated before or after the start of retirement has a significant impact on the calculation of the equalisation and the retirement pension. The spouse who is obliged to pay equalisation must generally expect a noticeable reduction in their retirement pension. Conversely, the person entitled to equalisation must bear in mind that pension benefits already received may lead to a reduction in the pension assets to be transferred.

It is important for both spouses to be aware of the possible effects of a divorce at retirement age and to take them into account when planning. It is therefore advisable to seek the advice of a specialised expert at an early stage.