How is my 2nd pillar divided in the event of divorce? Things you need to know
When you're going through a divorce, the question of how to divide your matrimonial property can be complex. One area that is often overlooked concerns your 2nd pillar.
On average, each citizen between 25 and 65 years old has
CHF 12’838 in vested benefits!
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This detailed guide offers a comprehensive overview of what could happen to your 2nd pillar assets during a divorce.
I. Introduction to the 2nd pillar
The 2nd pillar is an essential component of the Swiss pension system. This is the occupational pension scheme, which is compulsory for all employees above a certain income level. The amount accumulated in the 2nd pillar is generally used to maintain living standards after retirement.
II. Dividing the 2nd pillar in the event of divorce
In the event of divorce, the division of the 2nd pillar is a delicate issue. Barring exceptional circumstances, the assets accumulated in the 2nd pillar by both spouses are added together and divided into two equal shares.
In Switzerland, the equitable division of occupational pension assets in the event of divorce is governed by article 122 of the Swiss Civil Code (CC) and article 21 of the Federal Law on Occupational Retirement, Survivors' and Disability Pension Plans (LPP).
III. Exceptions to equal distribution
There are certain conditions under which the equal division of 2nd pillar assets may be waived. If both parties agree, you can waive equal distribution. This is common practice, since around 45% of divorces end without an equal division of 2nd pillar assets.
IV. If a spouse is not registered with a pension fund
If you or your (ex-)spouse were not registered with a pension fund, half of the couple's total second-pillar assets will be paid into a vested benefits account or vested benefits policy opened for the occasion.
V. Consequences of divorce on the 2nd pillar
Divorce has major implications for pension provision. Once the division has been established, it may be necessary to fill certain gaps. To assess the impact on your pension provision and take the appropriate measures, we recommend that you contact a pension specialist.
VI. Advantages and disadvantages of splitting the 2nd pillar in the event of divorce
Dividing the 2nd pillar in the event of divorce has both advantages and disadvantages. On the one hand, it ensures a fairer distribution of assets. On the other, it can lead to complications and additional costs.
The 2nd pillar is an important aspect to consider when getting divorced. It is essential to understand your rights and options in order to make the best decisions for your financial future. Professional advice is strongly recommended to help you navigate this complex process.
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Brevet fédéral de planificateur financier
Économiste d’entreprise HES
3rd Nov 2023