What is the right protection for cohabiting couples?

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Many couples choose to live together without a marriage certificate. Pension plans, which cover married couples as a matter of course, are not designed for concubinage. Our expert explains how you can easily protect your partnership.

  • Teaser Image
    Renzo Priore

    is head of the General Agency for Pensions and Assets in Rapperswil. He answers our questions on the topic of pensions and future planning and explains what is particularly important if you are a cohabiting couple.

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What do cohabiting couples need to know when it comes to their financial protection?

First things first: Cohabiting partners are only defined as such if it can be demonstrated that they have lived at the same address for five years or more. Within Pillar 1 (AHV), there are neither rules nor benefits for cohabiting couples. In Pillar 2 (BVG), it is possible to specifically benefit your life partner. If you have children in common or if you have already lived together for more than five years, the surviving partner can benefit from a pension entitlement in the event of their partner's death. Childless couples can benefit the partner in the pension fund.In Pillar 3a, there is a clear legal succession when it comes to beneficiaries. The marriage partner always comes in first place. If there is none, the cohabiting partner and direct descendants follow in second place.

I suspect that many pairs who are cohabiting are unaware that they have no legal inheritance entitlement. What should you do?

In order for the partner to claim an inheritance, a will must be written. In the will, other heirs must be granted their compulsory portion and the remaining benefits must be granted to the partner. The parents and children of the partner who died in concubinage have a right to their compulsory portion. If there is neither a will nor an inheritance contract, the parents of a deceased childless cohabiting partner have a 100% inheritance entitlement. For couples with children, the inheritance entitlement falls to the offspring.

In order for the partner to claim an inheritance, a will must be written.

Renzo Priore, pensions expert

How can cohabiting partners best protect themselves?

What you can do relatively easily: Register your concubinage with your employer so that your partner benefits under Pillar 2 if something happens to you. Make your cohabiting partner the beneficiary of the Pillar 3a pension. As mentioned above, legal requirements apply for the recognition of a concubinage – as a rule, it must be possible to demonstrate that the couple has lived together for five years. You can also protect the partnership under Pillar 3b. Under this plan, the beneficiary can be chosen freely – though the statutory compulsory portions must of course still be taken into account. It certainly makes sense in any case to speak with an AXA advisor. After all, for optimal protection, there are many questions that can only be answered with your individual situation in mind. This is often straightforward, and we will be happy to help you.

What advantages do you see in concubinage?

Couples who cohabit enjoy a tax advantage, since their incomes are taxed separately. Married couples are often at a disadvantage in this respect, as their incomes are added together. Admittedly, they benefit from a lower tax rate, but a double income enters a higher tax progression – the so-called marriage penalty. In legal terms and in terms of pensions, there are no advantages to concubinage apart from the ease of ending the partnership.

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