Spousal retirement maintenance and the admissibility of the investment form – Decision of the BGH
The question of how spousal retirement maintenance is to be used in the course of post-marital maintenance payments and in what form it can be appropriately invested regularly concerns the courts of first instance. With its decision of 06.12.2021 (Case No.: XII ZB 544/20), the Federal Court of Justice (BGH) has now established fundamental guidelines for the selection of permissible investment forms. The occasion was a court clarification as to under what conditions a private pension insurance policy with a capital option can be qualified as a suitable use of the assigned retirement maintenance. The decision contains far-reaching clarifications and provides a reliable guideline both for the courts issuing maintenance orders and for the entitled maintenance recipients.
Essential issue and context
The matter in dispute was whether the investment of the maintenance amount for retirement provision must necessarily be made in a product that is exclusively intended for retirement provision and guarantees a lifelong monthly pension payment, or whether products that alternatively allow the beneficiary the option of a one-time lump-sum payout (so-called capital option) are also covered.
Significance of retirement maintenance
Retirement maintenance is part of the post-marital maintenance owed under § 1578 (3) BGB. Its purpose is to ensure the financial security of the spouse entitled to maintenance for the period after reaching the statutory retirement age. The effective and targeted use of this portion of maintenance is the focus, with the legislature typically providing for the accumulation of additional pension entitlements to adequately close pension gaps.
The practical challenge in choosing the investment
Variety of retirement provision products
The market for retirement provision products is increasingly diverse. In addition to the classic private pension insurance, there are numerous hybrid models, fund-linked solutions, and variably designed products that offer the policyholder options regarding payout modalities at the end of the insurance period. In practice, products with an integrated capital option are particularly widespread. This means that the beneficiary decides whether the accumulated capital is to be paid out as a lifelong pension or, alternatively, as a lump sum.
Legal classification of the capital option
The central uncertainty up to now was whether the existence of a capital option excludes the recognition of the product as a permissible investment form for retirement maintenance. Different opinions in case law and literature spanned a spectrum from strict rejection to comprehensive approval under certain conditions.
Core findings of the BGH decision
The BGH has provided clarity with the present decision. In the view of the court, the creation of a private pension insurance which, alternatively, grants the policyholder a capital option, does not in principle conflict with the intended use of retirement maintenance. However, the BGH made further distinctions in detail:
Standard: Purpose-binding of retirement maintenance
According to the BGH, the decisive factor is that the chosen investment product primarily serves retirement provision. The option to choose a lump-sum payment instead of a monthly lifelong pension alone does not constitute abuse. As long as the required purpose-binding—that is, the accumulation of retirement provision—is maintained and the beneficiary does not exercise the option during the contribution phase (before retirement begins), the existence of this option does not conflict with the appropriate use.
Timing of allocation
According to the BGH, it is essentially decisive that the maintenance recipient does not make any other disposition over the capital during the accumulation phase that would run counter to the sense and purpose of retirement provision. Only at the point when the insurance benefit actually becomes due—typically after reaching the retirement age—may the use as a lump-sum payment require a new assessment. However, a further restriction does not already exist due to the mere possibility of a lump-sum payout.
Tax and economic implications
The decision is also based on the consideration that private-sector retirement provision products have a significant degree of flexibility. A restriction to products without options would in practice lead to maintenance recipients being excluded from market-standard conditions, which would contradict the scope of application provided by the legislature.
Impact on practice
The BGH’s decision gives maintenance recipients greater flexibility in the selection and structuring of their private retirement provision. Nevertheless, it obliges responsible handling of the capital option. Both maintenance obligors and recipients gain legal certainty that a private pension insurance policy with a capital option is generally to be recognized as a permissible investment form, as long as the purpose of retirement maintenance is preserved during the contribution phase.
Significance for future contract drafting
Especially when drafting contracts in the context of post-marital maintenance agreements and court settlements, the decision provides reliable guidance for agreeing on permissible retirement provision products. However, the question as to when a contractual instrument no longer meets the strictly purpose-bound character of maintenance remains to be examined in particular individual cases—such as in the event of an early choice of a lump-sum settlement—and may give rise to further disputes.
Conclusion and outlook
With the current decision, the scope for structuring the use of retirement maintenance is significantly expanded without sacrificing the protective purpose for the spouse entitled to maintenance. Maintenance obligors and recipients are nevertheless well advised to carefully review the selection and use of appropriate retirement products in light of the now-established settled case law, and to pay particular attention to the legal framework in complex contractual situations.
For further analysis of the implications of the decision or for the contractual structuring of retirement maintenance, the Rechtsanwälte of MTR Legal Rechtsanwälte are available.
