On 29 May 2019, the Dutch Council of Ministers approved a bill to ‘Modernise the rules for pension division as part of a divorce - 2021’. The bill aims to ensure that divorced people can move on independently from each other as quickly as possible - as far as their pension is concerned. A pension covenant can help them do that.

When getting a divorce, people generally pay little attention to pension, as they tend to be unaware of current legislation in this respect. As a result, they can be faced with the issue of splitting their pension years after their divorce.

Proposed legislation
The bill aims to automatically convert the pension allocated to each of the divorced partners into individual old age pension entitlements, unless the partners specify that they wish to make a different arrangement. Automatic conversion means the former partners are no longer dependent on each other when it comes to their retirement, because their old age pension entitlements are split at the time of the divorce.

Pension covenant
Given that automatic conversion is irrevocable, the ex-partners must make a conscious choice and record it. The introduction of rules for a pension covenant (similar to the already existing rules for a parental covenant) can help the ex-partners make such choices as part of their divorce covenant.

More information
Our website and Specials will keep you informed of the latest developments impacting your pension. If you have any questions regarding divorce, please contact the Pension Desk.