Divorced Abroad: What Happens to My Swiss Pension Fund?

• Pension equalisation
• Private Clients

You have divorced abroad, but what happens to your Swiss pension fund? The question affects more people than one might expect. If you worked in Switzerland, built up pension assets there and then divorced abroad, you may face an unpleasant surprise. Many people assume the foreign divorce judgment settles everything. Yet the occupational pension assets (the “2nd pillar”) accrued during the marriage often remain undivided, sometimes for years. This article is aimed at people who have been or are being divorced abroad and who hold pension assets in Switzerland. It explains in plain terms why a foreign judgment is not enough here, what risks you face and what you can do about them.

A Typical Case from Practice

Imagine a woman who has worked in Basel for twelve years and pays into a Swiss pension fund. Her husband lives in Germany. The marriage breaks down, and the couple divorces before a German court. The German judgment deals with maintenance and marital property, and apparently with pension rights as well. Both spouses assume the matter is closed.

Years later, the woman wants to withdraw her pension assets or retire. Her pension fund tells her that it cannot implement the foreign judgment. The division of the assets accrued in Switzerland was never validly ordered. This is the problem that many internationally divorced people underestimate.

What Is Pension Equalization?

The term “pension equalization” (Vorsorgeausgleich) refers to the division of occupational pension assets (2nd pillar) on divorce. It covers the money in the pension fund that employees and employers pay in during working life.

The principle under Swiss law is clear: pension assets accrued during the marriage are, as a rule, divided equally on divorce (Art. 122 ff. ZGB, the provisions of the Swiss Civil Code on dividing occupational pension assets on divorce). Each spouse is therefore in principle entitled to half of what was accrued between the wedding and the start of the divorce proceedings.

Note that only the portion accrued during the marriage is divided. Assets from the period before the wedding remain untouched. The spouses do not carry out the actual division themselves. The pension institutions do so, and only on the instruction of a court.

Why a Foreign Divorce Judgment Is Not Enough Here

This is the core of the problem. Since January 1, 2017, an important rule has applied in Switzerland: only a Swiss court may order the division of assets held in a Swiss pension institution. This exclusive jurisdiction is set out in Art. 64 Abs. 1bis IPRG (Federal Act on Private International Law, here the provision reserving such orders to Swiss courts).

In practical terms, if a foreign divorce judgment contains a provision on dividing Swiss pension fund assets, Switzerland does not recognize it. The pension fund may not and cannot implement such a foreign order.

The divorce itself is usually recognized in Switzerland, and that distinction matters. Switzerland accepts that the marriage has been dissolved. It does not accept the order dividing the Swiss pension assets. For that point, a supplementary procedure before a Swiss court is mandatory.

The Most Common Misconceptions

In our advisory work, we keep encountering the same mistaken assumptions. They can be costly.

Anyone who shares one of these misconceptions risks leaving a legitimate claim to part of the pension assets unused, or having to enforce it later at considerable effort.

• “The foreign court dealt with the pension, so everything is settled.” This is not true for the Swiss 2nd pillar.
• “My pension fund will divide the assets automatically once it learns of the judgment.” Without an order from a Swiss court, nothing happens.
• “I no longer have any claims after the divorce if I do nothing.” The claim exists, but you must actively assert it.
• “It is too late, because the proceedings were concluded abroad.” A supplementary procedure in Switzerland is possible even after the fact.

The Supplementary Procedure in Switzerland

For the Swiss pension assets to be divided, a so-called supplementary procedure (Ergänzungsverfahren) is needed. In it, a Swiss court completes the foreign divorce judgment with the missing order on pension equalization.

The court examines whether the foreign divorce can be recognized in Switzerland and then orders the division. It may depart from the equal-split principle where special reasons exist, for example where an equal division would be clearly inequitable.

Which Court Has Jurisdiction?

As a rule, the Swiss courts at the place of residence of a spouse in Switzerland have jurisdiction. If neither spouse lives in Switzerland, jurisdiction may depend on the location of the pension institution.

International jurisdiction can be complex in an individual case. One example is where both spouses live abroad but hold assets with several Swiss pension funds. It is therefore worth clarifying the position early. A wrong assessment can cost time and money.

What You Should Check Now

Whether you are still in the middle of foreign divorce proceedings or are already divorced, the following points will help you assess your situation.

• Were pension assets (2nd pillar) held in Switzerland during the marriage, by you, by your former spouse or by both?
• Does the foreign judgment contain a provision on dividing the Swiss assets that cannot be implemented in Switzerland at all?
• Has a supplementary procedure already been started or concluded in Switzerland?
• Do you have the necessary documents: a divorce judgment that can be recognized, the dates of marriage and divorce, and information from the pension institutions?

A divorce abroad does not mean that your Swiss pension fund assets are divided automatically. Dividing the 2nd pillar requires an order from a Swiss court, and since 2017 the foreign judgment alone no longer suffices. Our practical advice is to check promptly whether Swiss pension assets are affected and to gather the relevant documents early. If you already have the foreign judgment and pension equalization is still open, do not put off a supplementary procedure in Switzerland. International pension questions depend heavily on the individual case, so personal advice is worthwhile. We would be glad to help you clarify your claims and determine the right course of action.