You Separated but Did Not Divide the Pension: What Exactly Must Be Submitted to the Pension Fund?

The Main Document — An Application to Register the Ruling

The Law for the Division of Pension Savings between Spouses Who Have Separated, 2014, establishes a special procedure: the former spouse submits an application to the paying entity to register the details of the judicial ruling. The basis is the court or religious court ruling itself, which orders the division of the pension. An ordinary divorce certificate, a financial agreement without a relevant judicial ruling, or a general statement such as “the pension rights shall be divided equally” may not be sufficient for the fund. The precise list of attachments and the method of submission should be verified with the relevant paying entity, because the text of the law does not list a uniform set of documents.

Where to Submit: Not Always the Pension Fund

The application is addressed to the “paying entity” defined by law. For a pension fund, this entity is the management company; for a pension insurance plan, it is the insurance company; and for a budget-funded pension, it is the employer or the management company of the relevant central fund. Therefore, mentioning the fund’s name in the divorce judgment does not yet answer the question of who must register the entry. If the savings are held by different paying entities, the entity responsible for each pension product must be identified separately.

What Wording Will the Paying Entity Check?

For a rights-accumulation pension, the ruling must state the joint period and the separation date, and the joint period must not end after that date. The transfer share must be fixed as a constant percentage of the entire pension that would have been paid to the rights holder but for the division, and it may not exceed half of the total share. If the rights holder is not yet receiving a savings-based pension, the transfer percentage may not exceed half of the balance accumulated up to the separation date, and it must be identical for the contribution and severance-pay components. The fund is not required to convert an ambiguous agreement between the former spouses, on its own initiative, into the format prescribed by law.

What Happens After the Entry Is Registered?

After accepting the application, the paying entity registers an entry concerning the judicial ruling, including details of the entity that issued it, the joint period, the separation date, and the transfer percentage. In an ordinary division of the accumulated balance, the entity opens a new account for the former spouse and transfers the amount due to it, unless the court suspends the transfer. The transfer date is 45 days after notice of the entry’s registration is sent to the savings holder and the former spouse; if that day falls on a holiday, the deadline is postponed to the next business day. Registration is also important because it activates the direct-payment mechanism through the pension system.

Why Might the Deposited Amount Differ From the Calculation at the Time of Divorce?

For the accumulated balance, the starting point is the amount on the separation date stated in the ruling. The fund’s investment return for the period until the actual transfer is added to or deducted from the former spouse’s share, after management fees are deducted. The law also provides for tax on certain transfers; in relevant cases, the tax is divided equally between the transferred portion and the account holder’s balance. The severance-pay component may be transferred later and may require a choice regarding how it is received, so registering the entry does not always mean the immediate transfer of all components.

Delay Is Particularly Dangerous When the Pensioner Dies

Registration is not a formal technical procedure that can safely be postponed until the former spouse retires. With respect to a savings-based pension, the law separately regulates a situation in which the pensioner dies before the entry is registered: the condition may still be satisfied if the application was submitted before the death or within 30 days of the later of two dates—the date the ruling was issued or the date of death. Additional rules and deadlines apply to certain budget-funded pension arrangements, including those relating to the rights of a surviving former spouse. Proof of receipt of the application and the registration notice should therefore be retained together with the judicial ruling.

FAQ

Sources

• Law for the Division of Pension Savings between Spouses Who Have Separated, 2014

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