What happens to my 3rd pillar in the event of divorce?

The 3rd pillar is just as much a part of the Swiss pension system as the 1st and 2nd pillars. It enables you to maintain a comfortable standard of living when you reach retirement age. However, what happens in the case of a 3rd pillar and a divorce? In this article, you'll discover that the conditions for sharing pension assets depend largely on the type of matrimonial property regime chosen by the couple.

The three kinds of matrimonial property regime in Switzerland enable guidelines to be set for managing a couple's assets and proceeding with their distribution in the event of a potential divorce. Personal pension provision - or the 3rd pillar - is an integral part of the matrimonial property regime. The division of assets and the conditions governing it are therefore governed by this famous provident contract.

In cases where no marriage contract has been signed by the couple, the basic matrimonial property regime applies. This is also known as participation aux acquêts. When the couple divorces, all the assets they may have acquired during their marriage (also known as acquests) must be divided. On the other hand, their personal property - or biens propres - refers to everything each of them owned before the marriage, or that was given to them free of charge during their union. These assets therefore do not have to be shared and can remain in their possession.

As for the 3rd pillar, this is associated with assets acquired by the couple throughout the marriage. At the time of divorce, therefore, pension assets will have to be divided into two equal parts and according to the source of the contributions. Indeed, if the 3rd pillar was contributed by one of the spouses from his or her personal assets, the division will not take place. Otherwise, the amount to be paid to each party will have to correspond to the premiums paid during the marriage, with the addition of guaranteed interest and reduced if the pension contract is interrupted before the originally scheduled end date.

In the case of a marriage under the regime of community of property (also known as community reduced to acquests), a division of the pension capital saved on the 3rd pillar during the marriage, in equal shares, must take place at the time of divorce. One spouse's share will then have to be paid into another linked pension account, or 3rd pillar 3A. However, it is entirely possible to challenge this rule by means of a clause in the marriage contract. This could enable the community of property regime to be amended to establish the principles for sharing the retirement capital.

When it comes to a marriage under the separation of property regime, there are few questions to be asked, since this means that nothing has to be shared between the two parties in the event of divorce. The property of both spouses remains theirs. This also applies to the pension capital in the 3rd pillar account.

With tied pension provision, also known as 3rd pillar 3A, it is possible for part of the pension entitlement to benefit the other spouse, by decision of the judge or the policyholder of the 3rd pillar contract. In this case, the capital may be paid out in cash if the spouse is able to meet the repayment conditions. Otherwise, it can also be paid into another linked pension account.

As far as unrestricted pension provision, or 3rd pillar 3B, is concerned, no particular principles apply in the event of divorce.

In sum, it appears that the fate of pension capital in the event of divorce depends mainly on the matrimonial regime chosen by the spouses. Whether it is a tied or untied pension plan can also have an impact on the division of the sums saved. If you would like to know more about the 3rd pillar and divorce, please contact your financial advisor, who will be happy to answer your questions on a more personal level.