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Versorgungsausgleich and US Social Security

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I searched, and did not find anything on this particular topic.  I am wondering if any of my fellow Americans who have gotten divorced under German law have dealt with Versorgungsausgleich (pension equalization) as applied to US Social Security accounts, and if so, how it was handled.

 

Background

 

I am currently married to a dual DE/US citizen.  We were married in the US, and lived there for most of the time we were married.  We moved here in late 2016.  My soon-to-be-ex-wife (STBEW) filed for divorce under German law last year.  As of now, we have been married for nearly 18 years.

 

I paid into SS for 34 years.  STBEW paid into SS for 12 years.  Therefore, if we were never married, she would get a substantially smaller monthly payout than me upon retirement.

 

STBEW has paid into Deutsche Rentenversicherung for nearly 4 years.  I have paid into DRV for only 2 years.

 

US Social Security and Divorce

 

The US does not recognize the concept of pension equalization that the Germans have implemented.  However, there is a provision for ex-spouses:

 

  • If the marriage has lasted at least 10 years, AND
  • If STBEW remains unmarried
  • she can, upon her retirement, file a claim against my SS account
  • SS will not take money away from me.  Instead, STBEW will have her monthly SS payout increased to match mine
  • If STBEW chooses to get remarried, she will lose her right to claim against my account; however, she can claim against her new husband's SS (if the new husband has SS funds)

 

The SSA has definitively declared that it will not accept court orders from Germany that require moving funds from one account to another.

 

Versorgungsausgleich

 

The SS rules obviously do not match up with the German concept of pension equalization, and this has become a huge point of contention in our divorce.  STBEW, through her attorney, is refusing to accept this, and is pushing for an equalization regardless.

 

The problem is that there does not appear to be any clear guidance on this issue within German law.  Both my attorney and I have researched German case law, and it appears that the family courts have been all over the map on this.

 

Some (most?) courts that have dealt with this have simply declared that US SS will be excluded from equalization, or that there will be no pension equalization at all.

 

At least one German court declared that requiring the ex-spouse to remain unmarried in order to claim matching funds is patently unfair.  In that instance, the court decided to force the other party to make an out-of-pocket cash payment to the ex-spouse, thus "equalizing" funds, under the Law of Obligations.  There are, of course, numerous problems with this; the most blatant being that since the US does not recognize the Versorgungsausgleich concept, the ex-spouse can remain unmarried and file a claim for matching funds, thus double-dipping, and US SS will not do anything to prevent this.  No appeal was made in this case, so the decision was allowed to stand.

 

My attitude on the above is that there is nothing "unfair" about it.  If STBEW wanted to ensure guaranteed access to my retirement funds, she could have chosen not to do the things she did, and chosen not to file for divorce.  Apparently though, that is a very "American" attitude :wacko:

 

Neither of us has sufficient funds in DRV to make any sort of meaningful equalization of German pension funds.  Since STBEW has her own vested SS account, and since she can easily make a claim for matching funds against mine if she remains unmarried, my attorney has proposed that we skip pension equalization.  STBEW has refused to accept this (despite the fact that she says she has no interest in getting remarried), so her attorney is pushing for some sort of equalization via cash award or the like from me.  I, of course, cannot take money out of my SS account to give to her, and I don't have a pile of money laying around that I can just give to her for no good reason.

 

Since we cannot come to any sort of agreement on this, it appears that the court will have to rule on this issue.  So, my question - have any of my fellow Americans dealt with Social Security and Versorgungsausgleich, and if so, how was it handled by attorneys and/or the court?

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SS will not take money away from me.  Instead, STBEW will have her monthly SS payout increased to match mine

 

I do not believe this is correect. If she does not remarry she is eligiable to draw the spouse benefit on your accout which is 50% of your amount or she can choose to draw her own benefit on her earnings whichever is higher. Also her actual payment is  really based on your age at draw and her age. If shes starts say at 62 her payment is only 75% of the 50 percent as she has not reached full retirement age. (Actual deduction is based on age and birthdate) She only gets 100% of your benefit when you die as a survivor benefit. 

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How Much Will Your Divorced Spouse Receive 

If you have not applied for retirement benefits, but can qualify for them, your ex-spouse can receive benefits on your record if you have been divorced for at least two continuous years.

If your ex-spouse is eligible for retirement benefits on their own record, we will pay that amount first. If the benefit on your record is higher, they will get an additional amount on your record so that the combination of benefits equals that higher amount.

 

https://www.ssa.gov/planners/retire/applying7.html#h4

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The actual page off ssa is not well written because unless you dig further you could be lead to believe they get your full benefit, they dont. If they did your divorced spouse would get more than a actual spouse.

 

So go further to see spouse benefit which is what a qualified a qualifed  divorcee will get, 50% max based on their age at starting. Only upon your death do they then qualify for your full amount as a survivor benefit. 

 

At their full retirement age, the spouse’s benefit cannot exceed one-half of your full retirement amount.

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