You are entitled to part of your ex-partner’s pension after divorce. On January 1, 2022, the new Dutch law on pension distribution after divorce will enter into force. So, what’s going to change? Plus: Five golden pension tips for when your marriage ends.
A new law on the effects of divorce on pensions is currently in the pipeline in the Netherlands. The main change we expect to see is that the ex-partner will automatically receive half of their former spouse’s pension built up during the marriage. But an ex is entitled to half even under current legislation, unless you have come to a different arrangement.
Working it out
Harrie Alberti, a paralegal at APG, broadly sums up the current rules for us. “If partners separate, the pension of the participant – the person who accrues the pension – is distributed. The ex-partner is entitled to half of the pension of the participant who accrued the pension during the marriage. Any retirement pension accrued before and after the marriage is not distributed.”
Let’s look at a simple sample calculation:
- A participant’s total pension is worth €20,000.
- €15,000 of this was accrued during the marriage.
- The ex-partner will receive half of €15,000 = €7,500.
- The participant will receive €7,500 + €5,000 = €12,500.
The ex-partners may have the distribution carried out by the pension fund, as long as they apply for it within two years of the divorce, Harrie explains. “They can also agree not to share the pension or to come to some other arrangement.”
As for a partner’s pension, “If the person who accrued the pension dies, their ex-partner is entitled to a partner’s pension that was accrued up to the divorce. This part of the accrued partner’s pension is no longer payable to any new partner.”
New law takes effect in 2022
The new law will enter into force on January 1, 2022. Harrie sets out the most important changes.
- Pensions accrued during marriage are now automatically distributed. No action is required from the ex-partners from now on.
- After the distribution, the ex-partner of the person who accrued the pension is entitled to a pension of their own. They can then decide when the pension starts. This marks a change from the current situation. As things stand, the participant decides when their pension starts and the ex-partner then receives a part of that retirement pension.
- Only the part of the retirement pension and the partner’s pension accrued during the marriage will be distributed. At present, this applies only to the retirement pension. The partner’s pension accrued up to the end of the marriage is now entirely payable to the former partner.
Learn more about these changes (in Dutch):
Often overlooked
While ex-partners often recognize the importance of reaching a settlement, pensions are often overlooked in a divorce, explains mediator and divorce financial adviser Corrien Roche, owner of Roche divorcel advisers. “Many mediators and lawyers find it too complicated, so it is hardly ever discussed, if at all. But there can be a lot of money at stake. Aside from the house, your pension can be your largest asset.”
The VPS Act, which governs the settlement of pension rights in the event of divorce, stipulates that the retirement pension accrued during marriage must be distributed 50/50 by default in the event of divorce. But it doesn’t necessarily have to be that way, Corrien says. “Most people choose this route often because it’s easier or they don’t know what their options are. But you can instead leave your entire pension to the person who has accrued the least amount in their pension, or apply a settlement percentage to someone else’s pension.”