Division of Retirement Pension

A fund member and their spouse can enter into an agreement on the mutual division of retirement pension rights. An agreement on such a division of earned entitlements must be made before retirement begins and before the age of 65 of the parties to the agreement. The division only covers entitlements that have formed during the confirmed cohabitation or marriage.

Both parties must sign an agreement, a cohabitation and/or marriage certificate must be submitted that confirms the period that is to be divided according to the agreement, and both parties must submit a health certificate signed by a doctor. The health certificates are sent to the Fund’s company doctor for review.

We advise you to contact a consultant at your pension fund to assess whether such an agreement is suitable for you and your spouse.

Further information on the division of retirement pension

The Act on Pension Funds contains a provision that allows fund members to negotiate with their spouses on a reciprocal and equal division of earned retirement pension rights.

There are three paths possible for a married or cohabiting couple’s agreements regarding division

  1. dividing the earned pension entitlements,
  2. dividing future entitlements (the premium) and
  3. dividing payments once pension withdrawal begins.

Such agreements must be reciprocal and equal, covering only retirement pensions and pensions from pension funds and not spousal or disability pension rights. The division covers retirement pension rights that the parties have earned during the period of marriage or cohabitation.

An agreement on the division of rights must be made before the parties reach the age of 65 and before retirement begins. It is also a condition that the health of the parties does not reduce their life expectancy.

There is much to consider when examining whether the division of retirement pension rights is suitable, and people’s circumstances can be such that agreements on the division of rights are downright irrational. For example, it may be important how the parties’ spouse’s pension rights are structured and what effect the division of rights has on social security payments. It should be noted that once the retirement pension rights have been divided, that division is final and will not be reversed when one party becomes deceased. This does not apply to the division of retirement pension payments.

Agreements on the division of pension rights are relatively rare, for some reason. The option is certainly there and has been for a long time. These are opportunities that people in a marriage or cohabitation should familiarise themselves with and seek advice from the staff of their pension funds.

Instructions, a contract form and information on procedures and more can be found on the website of the National Association of Pension Funds.