Long separation periods can be considered in pension compensation
If a couple has been separated for a long time, they should also consider divorce, as the legal status changes as a result. This can particularly have financial implications, as a long separation period can also be taken into account when calculating pension compensation. This is illustrated by a decision of the Thuringian Higher Regional Court from November 29, 2024 (Az.: 4 UF 175/19).
When a marriage is dissolved, the competent family court automatically carries out the pension compensation. The pension compensation is based on the principle of equal division. Simply put, the pension entitlements acquired by the spouses are divided. This is intended to eliminate an imbalance that may have arisen during the marriage because one partner made professional compromises and thus acquired fewer pension entitlements, according to the business law firm MTR Legal Rechtsanwälte, which advises on family law among other things.
In addition to claims from statutory pension insurance, pension compensation also considers entitlements from private pension insurance, professional pension schemes, as well as company pension schemes and additional pensions in the public service.
Exception to the principle of equal division
There is an exception to the principle of equal division if the division of pension entitlements would be grossly inequitable or if the marriage was of short duration.
In the case before the Thuringian Higher Regional Court, it was not possible to speak of a short marriage. On the contrary, the couple had been married for 48 years before the man filed for divorce in 2016. However, the couple had already been separated for the previous 17 years. The divorce took place in 2019.
In calculating the pension compensation, the responsible family court in Erfurt did not take into account the separation period from 2000 to the divorce application in 2016. It justified this by stating that the couple had lived apart for 17 years and that it would be grossly inequitable to include this period.
No pension compensation in cases of gross inequity
The man opposed this. He applied to include the entire marriage period in the pension compensation. He argued that he initially had higher pension entitlements than his wife, who had higher income than him from 1991 onwards. His pension contributions had declined since 2000 because he had to take on lower-paid jobs due to illness and brief unemployment. It would be inequitable for only his wife to benefit from his earlier higher pension entitlements now.
The Thuringian Higher Regional Court followed the man’s reasoning. It stated that pension compensation does not take place if it would be grossly inequitable. However, this is only the case if the overall circumstances of the individual case justify deviating from the principle of equal division. The hardship clause of § 27 VersAusglG serves as a corrective to ensure justice. A very long separation period, in this case over 17 years, does not rule out pension compensation for the entire marriage period. However, it does provide a reason to examine whether a gross inequity exists.
No dissolution of the pension community despite separation
According to the hardship clause, circumstances that may be considered include whether the pension community was already dissolved due to the couple’s long separation, the OLG further explained. In such cases, the pension compensation lacks the original justifying basis. There is no standard for how long the couple must have been separated. However, the hardship clause is more applicable the longer the separation has lasted in relation to the actual cohabitation. At a minimum, the separation must make up one-third of the marriage period.
In the underlying case, there was no gross inequity. For the marriage had lasted 31 years before the separation in 1999. The spouses could thus rely on the existence of a pension community with mutual participation in the existing and future pension entitlements, the OLG stated.
This long marital community is not diminished by the 17-year separation period. For even after the separation, there is no dissolution of the economic community that originated from the marriage. Thus, the couple filed joint tax returns until 2015 or financed a shared property until its sale in 2017. Taking into account the economic entanglements beyond the separation, it is not considered grossly inequitable to consider the entire marriage duration in the pension compensation, decided the Thuringian OLG.
Circumstances in individual cases
The ruling shows that the separation period can be considered in pension compensation, but not automatically. It depends on the other circumstances of the individual case. To have a clear separation of finances, a separated couple should therefore consider divorce early on.
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