Are Rürup or basic pensions attachable? And how are lawyers and insurance intermediaries liable for protection in the event of insolvency? These are the questions posed by attorney Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm in the guest article.
Rürup annuities or basic annuities are in principle not contractually inheritable, as agreed with the insurer, nor can they be properly terminated, lent or sold, nor pledged. This requirement for tax deduction results from § 10 I No. 2b EStG. Experts from the company “Wikipedia” believe that the Rürup pension represents seizure-protected assets according to § 851c II ZPO – an advantage of the basic pension according to Wikipedia even in insolvency. In the same article, the tax-supported premium payment in the savings phase is presented as being protected against seizure in accordance with § 97 EStG, § 851 ZPO. A doctoral thesis in law, on the other hand, states more correctly that “§ 97 EStG is only applicable to the “old-age provision assets subsidised under § 10a or Section XI (EStG)” (Riester contracts).
Doctoral thesis leads to complete unseizability
In a new textbook, originally a legal doctorate, published by a publishing house for insurance experts, it is shown that, in contrast to the limited seizure-protected old-age provision according to § 851c ZPO, basic pension contracts are neither capital-forming nor do they have a surrender value, which is why they alone are not seizable in the savings phase. The capital of the so-called seizure-protected pension scheme, on the other hand, is to be transferred under § 851c ZPO – in contrast to the basic pension agreement – but above the set limits in the event of seizure, for example to creditors and insolvency administrators.
Thinking things through consistently to the end, one could claim that without a surrender value in a life insurance policy – as is supposedly the case with basic pension contracts – one could even protect arbitrarily high amounts – protected from creditors and insolvency administrators – as assets. The doctoral thesis justifies this: “However, as will be explained below, a seizure is ruled out simply because the Rürup pension is not a capital-forming pension instrument, with the consequence that the contractual partner is not entitled to a “surrender value”, either in the savings phase or in the payout phase, which the creditor could seize.
For substantiation, reference is made to a “Munich Commentary on the Insurance Contract Act” (VVG). The insurance sales force could hardly have written it better to promote sales in its brochures to attract customers. Ultimately, this also follows the argumentation of the German Insurance Association (Gesamtverband der Versicherungswirtschaft) on the unlimited attachment protection of the basic pension in de Ansparzeit, which has recently written on its website: “The GDV also points out that the pension capital of the basic pension is protected against access by third parties during the savings period. This means that neither the employment agencies nor the social security office or any creditors have access to the basic pension. Only the later pension can be seized above the exemption limits.”
Surrender values also exist without ordinary termination
Even if ordinary termination has been contractually excluded, the actuarial situation is in itself exactly the same as for any other capital-forming life insurance, and the non-payment of a surrender value in the case of both types of contract on termination does not mean that it does not exist and does not have to be transferred in the event of attachment. The insurer will treat the ordinary, i.e. contractually excluded, termination as a termination of the contract – i.e. do not expect any further payments for the time being. On the other hand, the creditor can terminate after an attachment, the insolvency administrator must proceed as in the case of an extraordinary termination or termination without notice – with the surrender value, possibly with the limited protection of the attachment-protected retirement provision in accordance with the German Banking Act. § 851c ZPO with transfer of the excess amount.
For comparison, however, any pension insurance can be used without death benefit, according to the type of basic pension, in any amount, and thus without payable surrender value (RKW). The allegedly non-existent RKW does exist, however, because according to the VVG it is decisive for the non-contributory benefit, e.g. when the contract is shut down, and this is also shown. Presumably PhD students in insurance and authors of Wikipedia have never held such an insurance policy in their hands and had to replace “not knowing with being able to write about everything”?
Rüruprente or basic pension shows surrender value
Here from an insurance certificate illustrating the surrender value for a basic pension:
” Current surrender values: guaranteed benefit *) EUR 5729
guaranteed profit participation *) EUR 152
Total amount incl. Profit participation *) EUR 5881 *)
Due to the provisions of the Retirement Income Act on the basic pension, there is no available credit balance for your contract. A payout is only possible in the form of a lifelong pension in accordance with the insurance conditions.” About 6,200 EUR were paid in three years.
The point is that by contractual arrangements that someone is not paid back anything, but only as a pension, you cannot also prevent seizure. It is not possible in the entire enforcement law of the Code of Civil Procedure (ZPO) to exclude sovereign enforcement by means of judicial attachment by means of a private-contractual provision prohibiting pledging or mortgaging.
Contractual exclusion of termination does not prevent termination by insolvency administrator
The German Federal Supreme Court (BGH, ruling of 1 December 2012, file no. IX ZR 79/11) has already ruled that a contractual exclusion of termination does not prevent the realisation of the life insurance policy through a termination by the insolvency administrator. In case of doubt, the entire assets accumulated with the insurer through premium payments are gone – creditors can seize the surrender value by sovereign order through the enforcement court and have it transferred, insolvency administrators can terminate the insurance contract (only contractually non-terminable and only contractually non-assignable) and collect the assets. The Federal Court of Justice stated: “However, according to § 851 (2) ZPO, non-transferable claims can be attached by agreement if the object owed is subject to attachment.
Basic pension (Rüruprente) can also be seized before the pension begins
For (possibly partial) unseizability, additional regulations are required, for example, that the prerequisite for protection against seizure under § 851c ZPO exists. However, this is not automatically the case for insurance contracts that are brokered as a basic pension. Whether the conditions for attachment protection are met should always be checked by an expert. This is because basic / Ruerkup pensions are by their very nature first of all knitted in such a way that the tax office recognises them for tax purposes, and are not always aligned in accordance with § 851 c ZPO.
A prohibition of exploitation contractually agreed with the insurer would speak against the limited protection against attachment for old-age provision in the Code of Civil Procedure and thus circumvent it. Therefore, the Federal Court of Justice (BGH, ruling of 01.12.2011, file no. IX ZR 79/11) decided that the contractually stipulated exclusion of exploitation cannot prevent attachment. The vast majority of insurance brokers in Germany offer at best partially garnished-protected pension insurance policies, currently at most with the prospect of a pension of less than 600 euros per month.
Good advice from your insurance agent, tax consultant or doctor?
As investors one can use the firm and with substantial lobby work of insurers and their federations strengthened conviction of most mediators and insurers, the basic pension is in the savings phase in any height unseizable, nevertheless for itself, in order to reach a complete seizing protection.
All you need to do is to seek advice from one of the many experts on how to hide your money in a basic annuity contract in a safe place. It may be necessary to change the intermediary, because some intermediaries have already become cautious in this respect. It is important to insist on advice and also documentation, to address the point of 100% attachment security in the savings phase and to ensure that this is recorded in the written documentation without any ifs and buts. An additional confirmation by the insurer can do no harm to make the insurer liable. For this it will be advisable to point out such doubters as the authors of this article, which is why a very clear confirmation is needed.
This then makes it possible to claim compensation later on from the liability insurance of the tax advisor or broker, or from the insurer who was happy to advise on this.
A further option is then to retrieve the money later in many cases, even if the Rürup contract had subsequently proved to be uneconomical, if one had been recruited to conclude the contract with a false assurance of attachment security, for example by contesting it on the grounds of malicious deception or as compensation for immoral damage to one’s own assets for old-age provision. Due to the limitation periods for fault in consulting, it may be advisable to file a timely action for a declaratory judgment that intermediaries or insurers are liable for the loss of the basic pension claims acquired through contributions as a result of the attachment of capital during the savings phase.
Efforts to protect assets by means of a basic pension would otherwise later prove to be largely in vain, but certainly not in vain. However, there are still enough intermediaries and insurers who do not smell the roast and are happy to enter the liability trap by expressly confirming with firm conviction that the basic pension is completely unseizable to the policyholder or applicant. This means that the investor is then protected by the liability of the provider of the basic pension and of the intermediary or his liability insurance – as far as this is sufficient – even if the basic pension does not prove to be seizure-proof later before the pension begins.
By Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.procontra-online.de (published on 26.04.2016)
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About the author
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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