Dutch law is very clear on what happens to pensions upon divorce. Unless you explicitly agree otherwise in the divorce settlement, all pensions built up during the marriage are shared. The principle is that both spouses are entitled to an equal share of any pension built up during the marriage. This is also known as pension equalisation (‘pensioenverevening‘).
Pension sharing after divorce
Within The Netherlands pension equalisation is carried out by your pension fund upon receipt of a copy of the divorce settlement. The pension fund automatically separates an amount for the other spouse from the main pension and pays this directly to the other spouse when the pension becomes payable. The pension fund is only obliged to carry out equalisation if so requested within two years of the divorce. If you are too late, then you will have to recoup your share from your ex-spouse when they receive their pension.
The law also requires certain funds equivalent to pension to be shared, for example pension reserves in a limited company or a life insurance policy specifically bought to supplement pension.
Pension equalisation has its disadvantages, especially if there is an age gap between the spouses. You don’t receive any pension until your ex-spouse does. If your ex-spouse dies before reaching pensionable age, you may only be entitled to a much lower widow(ers) pension.
Opting out of pension sharing
Dutch law allows for opting out of pension equalisation. You can even exclude pension sharing in a prenuptial agreement.
There are three other options available.
- Total exclusion of pension sharing, often chosen by younger couples with similar income and prospects for the future or after short marriages.
- Pension conversion, meaning that a separate personal pension is created out of the available pension share for each spouse. This means that the other spouse has control of the pension and can determine when it is paid out. Not all pension funds cooperate with pension conversion. Pension conversion can also be a good solution if is an age gap between the spouses.
- Made to measure agreements, for example only sharing certain pension policies or paying a lump sum as a final settlement in lieu of pension sharing.
In all cases, the opt out must be clearly agreed in writing in the divorce settlement or a prenuptial agreement.
Pensions in divorces concluded before 1995
Pension equalisation was introduced in 1995. If you were divorced before then, a different regime may apply. You may still be entitled to a share of your spouses’ pension as a pension claim is not subject to a statute of limitation, but you will have to take the initiative to claim pension from your ex-spouse.
The Dutch rules may also apply to foreign pensions. Many expatriates have built op pension in different countries. However, foreign pension funds do not always recognise Dutch rulings on pension. Therefore, it may be necessary to obtain a separate pension order in the country the pension is administrated in to receive pension directly. The alternative is waiting until your ex-spouse starts receiving pension and then applying to them for your share. Needless to say that relations are often not the best and it may need further litigation to receive your share.
It is important when agreeing a divorce settlement that you make provisions for the sharing of foreign pensions and that your lawyer understands that the Dutch rules may not apply. It is also advisable to ask your pension funds what the possibilities for sharing pension are.
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