Divorce. Version:

Transcription

1 Divorce Version: Version

2 Divorce and pension There are ten thousand divorces in the Netherlands every year. Divorce leaves (marriage) partners with a lot of affairs to arrange, including their pensions. The question that arises here is: what about the pension entitlements both partners have accrued over the years? This brochure outlines what needs to be done and describes how to arrange pension matters in a proper way in settling divorces. After the divorce, a proportion of your retirement pension must be paid to your former partner when you retire. The retirement pension that your former partner receives is called an equalized pension. If you should die, your former partner is also entitled to a partner s pension - the special partner s pension. If you have also accrued capital during your marriage under a pre-retirement scheme, that also has to be distributed equally. The same applies if you have accrued a pre-pension entitlement (temporary retirement pension and early retirement pension). The law stipulates how all these different matters should be settled. However, you can also deviate from the statutory rules by having a divorce agreement drawn up, or by including an agreement on this in a pre-nuptial agreement. If you do not want to follow the statutory rules, you will always require the assistance of a lawyer or notary. When we refer to marriage in this brochure, we also mean a registered partnership or (under certain circumstances) a notarial cohabitation contract recognized by PDN. When using the term divorce we also mean the termination of a registered partnership or a notarial partnership. Divorce Upon divorce the marriage is dissolved and any partner s pension and retirement pension must be distributed by law. For notarial cohabitation contracts the above applies only when included in a certified termination contract. Divorce agreement A notary or a lawyer can draw up a divorce agreement. In the agreement the parties can agree to deviate from the rules that the law stipulates for the distribution of the pension entitlements upon divorce. Divorce agreement sample texts are available upon your request via our Pension Desk +31 (0) or info.pdn@dsm.com). Pre-nuptial agreement You can draw up (or amend) a prenuptial agreement before you get married, but also during your marriage. In the agreement you can make arrangements on how to settle your pension affairs if you should ever get divorced. Version

3 Costs of arranging the distribution of pension yourself If you arrange the division of retirement pension and any savings yourself, PDN will need to make some calculations for you. These calculations entail costs that will be shared equally between the former marriage partners. Upon payment of the first benefit, the costs will be deducted. Retirement pension and divorce A law passed on 1 May 1995 (Wet verevening pensioenaanspraken bij (echt) scheiding [Pension Entitlements Settlement (Divorce) Act] determines how the retirement pension should be distributed on divorce. This relates only to the distribution of the retirement pension accrued during the marriage and not to other pension components such as the general state pension (AOW), annuities or partner s pension, which are regulated in other laws. What about your retirement pension when you get divorced? When you retire in the future, your former partner is entitled to half of the retirement pension that you accrued during the marriage - called the equalized pension. If your partner has accrued retirement pension in his or her own right during your marriage, you are also entitled to half of that pension when your former partner retires. If the form is sent in within the statutory two-year period after the date of divorce, the signature of one of the partners suffices, provided the standard division (50% / 50 %) is opted for. If the form is submitted later than two years after the date of divorce, it will still be processed by PDN as long as both former partners have signed it. This holds only for divorces as from 1 January If you do not send this form to PDN, the whole of your retirement pension will be paid to you as of your retirement date and you will then have to transfer part of it to your former partner each month. If you or your former partner have accrued retirement pension with more than one pension fund, you should also send a completed form Notification of divorce for the purpose of distribution of retirement pension entitlement to these or that pension fund(s) respectively. After having sent the above form to PDN, you will be notified within two months of the amount of your share of the retirement pension and the amount your former partner will receive. We will also inform your former partner about his/her part. To ensure that PDN pays you the retirement pension and your partner is paid the equalized pension in future, you must fill out and send in the form Notification of divorce for the purpose of distribution of retirement pension entitlement [Mededeling van echtscheiding in verband met verdeling van ouderdomspensioen]. You can request this form from the Dutch Rijksoverheid ( Version

4 Once the distribution of the retirement pension has been established, the amount of the equalized pension may still increase over time, if the pension fund decides to grant supplements (index) to maintain the purchasing power of the pension. The equalized pension from your former partner is going on when you retire. If you decide to deviate from your retirement date it will affect the height of your retirement pension, as it will affect the date and amount of the equalized pension that your former partner will receive. Example Peter and Marie get divorced. At that time, Peter is 45 years old. Peter and Marie have been married for 20 years. Peter started working when he had been married for five years, so during his marriage he accrued 15 years of pension with PDN. The accrued retirement pension for that period is, for example 15,000 euros (gross). If Peter retires, Marie will receive 7,500 euros (gross) equalized pension a year. This amount may be higher if PDN has granted supplements in the intervening period. Example Peter from the previous example is now a bit older. When he is 70 years old, Marie dies after having received an equalized pension from PDN for five years. For Peter, this means that his retirement pension is increased by 7,500 euros (gross) a year. Divorce after retirement A couple may also divorce after retirement and in this case the law also prescribes that the retirement pension accrued with PDN during the marriage is distributed equally between the partners. Example Jan and Inge get divorced when Jan is 70. From the time of his marriage until his retirement Jan accrued 35 years of retirement pension. His retirement pension is therefore 35,000 euros (gross) a year. After the divorce, both Inge and Jan receive 17,500 euros (gross) retirement pension from PDN. Death Benefits What happens if you or your former partner die? If your former partner dies, you will receive the full claim to the retirement pension again. The (special) partner s pension entitlements which have arisen following the divorce will expire. If you die, your former partner will not receive the equalized pension, but will receive a special partner s pension instead (see chapter partner s pension and divorce). Version

5 Re-marriage after a divorce If you re-marry after a divorce, your new partner will, after divorcing from you in years to come, be entitled to an equalized pension accrued during the period your second marriage lasted. End of cohabitation When your cohabitation agreement is terminated, your former partner is entitled to the special partner s pension. Your former partner is also entitled to equalized pension, if this has been incorporated in the agreement. If you end a partner relationship, but there has not been any cohabitation agreement, your former partner is not entitled to any special retirement pension or partner s pension from PDN Retirement pension The pension you are entitled to as of your retirement date. You can opt to draw the retirement pension earlier, which will affect the amount of the retirement pension. The capital that you have saved during marriage under the pre-retirement scheme should also be distributed equally between you and your former partner on divorce. The same applies if you have accrued a pre-pension entitlement (temporary retirement Net pension scheme (NPS) PDN s Net Pension Scheme (NPS) offers opportunities to save for extra pension for those employees earning over 100,000 a year. The NPS provides options for this purpose. The scheme allows purchase of pension entitlements with additional pension capital. Any capital saved during the marriage will be divided equally over you and your partner. The same applies for pension entitlements purchased under the NPS scheme. The conditions and detailed info can be found in the dedicated brochure. Equalized pension The part of the retirement pension to which the former partner is entitled. Payments to the former partner start after you retire. Pre-pension capital A lot of employees have in the past been offered the opportunity to make additional savings in order to accrue a higher pension or for early retirement. This opportunity was offered under the preretirement scheme (see separate brochure). Version

6 Partner s pension and divorce In addition to a retirement pension, you also accrue a partner s pension. If you should die while still working, your partner will receive 70% of the retirement pension that you would have accrued with PDN if you would have worked up to the general state pension age. If you get divorced, your former partner has a legal entitlement to the partner s pension that you have accrued from your pension participation up to the date of the divorce, which is 70% of the retirement pension accrued up to that date. This is what we use to call the special partner s pension. Example Kees and Jolanda get divorced. At that time Kees is 45 and has worked and accrued pension for 15 years. The pension accrued in 15 years entitles him, for example, to an annual retirement pension of 15,000 (gross). If Kees and Jolanda live until Kees retires, Jolanda will receive, from that time, 7,500 (gross) equalized pension from PDN. However, if Kees dies before Jolanda, Jolanda loses the right to an equalized pension of 7,500 (gross). However, she will then receive a special partner s pension entitlement of 70% of 15,000 (gross) or 10,500 (gross). Temporary and supplementary partner s pension A former partner who receives a special partner s pension may also receive a special temporary partner s pension until he or she reaches the general state pension age. The special temporary partner s pension is intended to compensate for the higher deductions until the former partner reaches his or her pension age. The special temporary partner s pension amounts to 20 percent of the special partner s pension. After divorce, a former partner is no longer entitled to receive a supplementary partner s pension. The supplementary partner s pension is intended to compensate for the fact that your partner will not receive a general state pension (AOW) until the pension age. Example If Kees from the previous example dies before his retirement date, Jolanda will thus receive in addition to the special partner s pension of 10,500 (gross), a temporary special partner s pension of 2,100 (gross) (i.e. 20% of 10,500) until her general state pension age. However, she will not receive a supplementary partner s pension. Version

7 Partner s pension Pension payment to the partner upon your death. The partner s pension amounts to 70% of the accrued retirement pension. In the event of death during active service of DSM, partners receive a pension that equals 70% of the retirement pension you would have ultimately accrued with PDN as if you would have worked until your state pension age. The phone number is If you and your partner are settling the distribution of your pension entitlements yourselves through a notary or lawyer, you should send PDN a copy of the agreements made, together with the form Notification of divorce for the purpose of distribution of retirement pension entitlement. Special partner s pension Pension payment to your former partner upon your death. The special partner s pension amounts to 70% of the retirement pension you accrued up to the date of divorce. Do you live abroad? If you get divorced while you are living abroad, you must notify PDN of this. If you were married, then please send us a copy of the divorce agreement. If you had a registered partnership, then send a copy of the dissolution contract. If you were cohabiting and have duly notified PDN, please send us a copy of the termination agreement. What pension-related action must you take if you get divorced? Pension-related actions are necessary when you wish that the pension payment to your former partner will be done by the pension fund. You should notify PDN of the divorce within two years after the date of divorce using the form Notification of divorce for the purpose of distribution of retirement pension entitlement. This form can be obtained directly from the Dutch Rijksoverheid ( Conversion and divorce There is another option besides the legal distribution of the retirement pension, partner s pension or pre-pension capital described above: Pension conversion. There is a significant difference between conversion and the distribution option referred to in this brochure. With conversion, the part of the retirement pension, special partner s pension and any pre-pension capital that goes to your former partner becomes a separate entitlement. The amounts you and your former partner are entitled to make up, as it were, two separate pension pots. After conversion, you and your former partner have no further dealings with each other as far as pension is concerned. In the non-application of conversion and upon death of your former partner, you get back your full retirement pension. After conversion that is no longer possible. Conversion offers your former partner the chance to transfer the money set aside for him or her on divorce to another pension fund. He or she then has nothing more to do with PDN. That too was impossible with the distribution option described in this brochure. Once you and your former partner have decided on conversion the decision is final, and once carried out, conversion cannot be reversed. Version

8 After conversion, you and your former partner receive a retirement pension from your own pensionable age. Your former partner is no longer dependent on the retirement date for your pension. Conversion is possible. It can only be done on divorce, after dissolution of a marriage following legal separation, so not on legal separation, at the end of a registered partnership, on termination of a notarial cohabitation contract. In all cases the conversion agreement should be included in the contract drawn up by a notary or lawyer. Another condition for conversion is that PDN gives its consent. PDN will give this consent only if the following conditions are met: 2) The agreement for conversion must be established in the pre-nuptial agreement, the pre-partnership agreement, the divorce agreement or the cohabitation agreement. 3) One of the following documents must be handed over to PDN: a certified copy of the pre-nuptial or partnership agreement; a certified copy of an extract from the pre-nuptial or partnership agreement; a certified copy of the divorce agreement; a certified copy of a termination of a cohabitation contract which includes the choice of conversion; a certified copy of an extract of the divorce agreement. The extract or copy must be certified by a lawyer, a notary, or by a foreign authority that signs and/or stamps the document. 1) Both partners sign the form Notification of divorce for the purpose of distribution of retirement pension entitlement and choose conversion option on the form. You can obtain the form from the Dutch Rijksoverheid ( The phone number is You must fill out and return the form within two years after your divorce. More information Call the PDN Pension Desk for any questions about divorce and pensions during office hours ( ) or mail your specific question to info.pdn@dsm.com. More information on this subject can be found at Search for familie en gezin [family], then click on familie, jeugd en gezin en scheiden. The phone number is The website also provides a lot of useful information. The Ministry of Justice provides information at Click on Familie en gezin and then on Scheiding en alimentatie [divorce and maintenance]. You can also visit the website of the Vereniging van Familierecht Advocaten en scheidingsbemiddelaars (VFAS) [association of family lawyers and divorce mediators]. Version

9 Martijn (45 years old) and his partner Natascha (42 years old) are going to divorce. They have decided to share Martijn s PDN pension entitlements by means of conversion. During the time that he was married to Natascha, Martijn accrued entitlements for a retirement pension worth 25,000. He also accrued 17,500 of entitlements for partner s pension, and entitlements worth 3,500 for temporary partner s pension. (All are gross amounts per year) After conversion, Martijn s and Natascha s pension entitlements will be as follows: From his retirement date to his death, Martijn will receive: Retirement pension: 13, (gross per year) From her retirement date to her death, Natascha will receive: Retirement pension: 17, (gross per year) If Martijn and Natascha had chosen equalization instead of conversion, then their pension entitlements would be as follows: From his retirement date to his death, Martijn will receive: Retirement pension: 12,500 (gross per year) From Martijn s retirement date until he dies, Natascha will receive: Special retirement pension: 12,500 (gross per year) This benefit will end on Martijn s death If Martijn dies, Natascha will receive (until her death): Special retirement pension: 17,500 (gross per year) and until her (target) retirement age Temporary partner s pension: 3,500 (gross per year) The differences in the entitlements after conversion or equalization are due to different methods of calculating these entitlements. In the case of equalization, only Martijn s life (and death) is taken into account. With conversion, there is no longer this link to Martijn s life and Natascha receives her own rights. (All amounts are gross per annum) Version

10 Overview You get divorced and your former partner is still living. Your former partner receives half of the retirement pension accrued during the marriage. The amount of equalized pension received by your former partner is deducted from your retirement pension. Your former partner dies before you do. Your retirement pension is increased with the amount your former partner was entitled to. You die after retirement, your former partner is still living. Your former partner loses his or her share of the equalized pension that was accrued during your marriage. Your former partner may still receive a special partner s pension. You die before retirement: Your former partner may become eligible for a special partner s pension. Version

11 Contact If you have any questions about your pension visit the website: or contact our Pension Desk: tel or Regulations Read more about divorce and pension in the pension regulations by clicking on the icon. Disclaimer The information provided in this brochure by Stichting Pensioenfonds DSM Nederland, based in Heerlen (the pension fund) is general, purely indicative and subject to change. It is intended only to provide members with a general view. The information provided is assumed to be reliable, but is used entirely at the user s risk. Neither the administrator (DSM Pension Services B.V.), nor the pension fund accepts any liability for damage arising from errors or omissions in the information, or for damage arising in connection with the use of, reliance on, or distribution of the information. Rights can be derived only from the pension regulations applying to the member. Version