What will happen to my retirement savings if I get divorced?

A divorce or separation is not only a very difficult emotional experience for a couple. The ex-spouses often also face considerable financial consequences. Household and family expenses that were previously covered jointly now have to be met by each person individually. It may become more difficult to set money aside for retirement, for example.

This can have serious consequences for old age, especially for the partner with the lower income. The same applies if one spouse reduced their workload to bring up a family. This mostly affects women, who are more likely to have pension gaps due to maternity breaks and subsequent part-time employment. In pillars 2 and 3 in particular, a separation can result in significant losses in retirement assets and pensions.

This makes it all the more important to ensure the financial independence and security of both partners at an early stage.

If you have decided that you don’t want to grow old with your partner after all, going your separate ways will also have an impact on your pension planning. The retirement capital saved up during the marriage is divided in different ways for each pillar.

Pillar 1: OASI splitting after a divorce

Splitting means that the gross salaries credited to both partners during the marriage are taken together and divided equally between the individual accounts. This splitting can’t be circumvented by a marriage contract or other contractual provisions.

The financial consequences can be considerable if one spouse didn’t work during the marriage. When the couple divorces, the person who is not in employment is no longer covered by their partner, and must pay OASI contributions themselves in future.

As soon as the divorce has been finalized, an application for splitting should be submitted to the OASI compensation fund. If the application is not made by the spouses themselves, or if the spouses have reached OASI age, the compensation office will automatically carry out the splitting at the latest when calculating the pensions due. However, if the divorce took place a long time ago, this can lead to delays in some cases. It is important to take into account the reform to stabilize OASI (OASI 21), which has been in force since 1 January 2024.

Only full calendar years are taken into account for splitting purposes. The year of the marriage and the year of the divorce are not included in the calculation. Splitting is mandatory regardless of the matrimonial property regime, i.e. it cannot be prevented even if the couple has opted for the separation of property regime.

Pillar 2: pension funds after a divorce

The occupational retirement planning assets accrued during the marriage are halved after the divorce and divided between the spouses. This type of division is also known as pension equalization. The amount taken into account is the sum of all the contributions, plus interest, paid during the duration of the marriage – to the exact day. The date taken into account is not the date of separation but the date of the official pronouncement of the divorce.

Pension fund withdrawals for the purchase of residential property during the marriage are included in the pension equalization calculation on divorce. The calculation also takes account of which spouse will keep the property after the divorce. The assets are still divided if one spouse is already retired or invalid at the time. There are two options for having assets paid out: either the hypothetical benefits on leaving the pension fund are calculated and split up, or the existing OPA pension is divided and converted into a lifelong pension for the valid/non-retired person.

Voluntary purchases that were demonstrably made with a spouse’s own assets are not included in the pension equalization calculation. Assets that were saved in the occupational retirement planning scheme before the marriage are not taken into account either.

Divorces and occupational retirement savings

The age of the spouses at the time of the divorce has a major influence on the amount of the pension equalization. Around two thirds of divorces take place before the age of 50. In many cases, less than half of the retirement capital has been saved in the pension fund by this point. This poses a particular risk for women if they worked part-time or didn’t work at all for long periods during the marriage while looking after children. Private retirement planning becomes all the more important in these circumstances.

Checklist for the division of occupational retirement savings

1. Ask all pension funds for a current pension certificate. You should mention that you also need to know the credit balance on the date of the marriage because you are getting divorced. Comparing this amount with the current vested benefits balance will provide the basis for dividing the retirement savings.
2. Don’t forget vested benefits accounts and policies that you may still have from previous employment relationships.
3. List all the amounts withdrawn from pillar 2 during the marriage, for example for home ownership or self-employment.

Pillars 3a and 3b after a divorce

The division of pillar 3 assets depends on the matrimonial property regime. Unless another regime has been defined by contract, the community of acquisitions regime generally applies. In this case, the assets accrued during the marriage in pillars 3a (restricted retirement savings) and 3b (unrestricted retirement savings) are divided equally. It doesn’t matter whether the retirement assets were saved via a bank or an insurance company. The division of 3a assets must be recorded in the divorce settlement. The divorce must always have been pronounced in court and declared legally binding.

Divorce does not change the nature of the retirement capital in pillar 3a: it remains restricted.

Divorce hurts – not just emotionally, but usually financially as well.

However much you have to rearrange your immediate future after a separation, you shouldn’t forget to make provision for the long term as well. Even if the idea of preparing for bad times in good times isn’t easy, protecting yourself proactively is more than worth considering. By drawing up a marriage contract that specifies any individual conditions contrary to the statutory provisions, both ex-spouses will be ready – if the worst comes to the worst – to face the future.

Or better still: if you make yourself financially independent from your partner during your marriage, you are sure to be better off after a divorce.