Protection of pension contracts from debtors and creditors in Austria and Germany

– How residents obtain foreign enforcement protection through foreign retirement plans -.


Life insurance policies for private and occupational retirement provision are often intended to protect against ill-considered premature termination by the beneficiary, but also against enforcement. In Germany and Austria, there are very different types of contracts, some of which are state-subsidised. Protection against execution, in particular garnishment, also varies, so that it makes sense to optimise it on a comparative law basis.


In 2014, Verlag Versicherungswirtschaft (VVW) published the work “Die Besonderen Altersvorsorgeverträge des privaten Rentenversicherungsrechts und ihr Schutz vor Gläubigern in Österreich und Deutschland” by Dr. Albert Prahl, ISBN 978-3-89952-531-1, 443 pages for 75 Euros.


This work is particularly well suited to making it clear to the reader in depth what can and cannot be known in view of the complex and not always clear legal situation. The legal situation, including current case law, is presented – including proposals for legal amendments and clarifications in Germany and Austria. Such a problem-oriented presentation is certainly better than bogus marketing knowledge sold as certain.


Even if the situation in Austria and Germany leaves many questions unanswered, a comparison is of course even more limited. After all, there are still similarities in Austrian and German law, but the two legal circles are gradually developing apart in detail and even the underlying – e.g. social – ideas. The author is interested precisely in the details that are not necessarily accessible to a consistent logical system, which has its own value as a work. The deeper one delves into the subject matter, the clearer it becomes to the reader that the legal situation can never be simply understood or logically consistent.


By way of example, it is clarified that (only by law) in Austria and Germany non-assignable claims are always – also cross-border – in principle not attachable. Nothing can be seized if the pledged object is subject to a (legal) prohibition of sale. In Germany, the supplementary rule applies according to which (legally) unseizable claims are also not assignable, § 400 BGB. However, a non-assignable claim may (by law) nevertheless be declared attachable. “The unseizability is included as a minus in the untransferability”. Thus, by way of example, the legal situation is illuminated more clearly in each case against the contrast of the other country.


There are certain limits to a consistent logical presentation due to the sometimes quite illogical or partly unexpected case law, which the author then deals with in detail. At the same time, the respective status of case law, whose decisions sometimes contradict the clearly expressed “idea” of the legislator, has by no means decided everything.


Some judges like to invoke the saying “the law is sometimes smarter than the legislator” – in reality they deny that the legislator had anything in mind, and put in its place what he “reasonably should have intended”; this then includes the correction of errors, misconceptions, as well as values considered outdated.


The author already praises the “social climate” of the Austrian legislator in his preface. This can also be understood as an indication that, in principle, it is advisable to look abroad in the case of old-age provision, where, depending on the attitude, a different level of protection – also for the family – can be observed in the case of occupational and private old-age provision than where creditor interests carry greater weight. This is by no means limited to Austria.


The new reference book exemplifies that in the case of “the attachment of cross-border pension claims against obligors/debtors resident in the [jeweiligen EU-] domestic country on the basis of domestic execution titles [also vollstreckbaren Titeln] and third party debtors in the respective other country”, then in the case of the application of private international law a foreign level of protection (against access by creditors) will be decisive if it is higher than the domestic level. If the case is reversed, i.e. if the domestic level of protection is higher, then “the higher domestic” level is to be applied because of the “ordre public as a national safeguard of minimum living conditions”.


It is also important to note that a subsequent move does not change the applicable law. Thus, it depends on which law was chosen and whether the choice of law was effective, for example, according to the relevant national and European legal standards. These national and international choices of law are treated historically as fundamentals.


Products from abroad can therefore be recommended simply because of the security against insolvency. In addition, they often offer other advantages. Just by way of example – with a likewise more favourable “social attitude”, pension insurance companies from Switzerland, for example, offer higher pensions for men than in Germany, because there men are still allowed to calculate with their own shorter life expectancy, and men and women are not “treated equally”. Without lawyers and actuarial experts, of course, no customer will be able to find the optimal solution for himself.


by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm


by courtesy of (Expert Report 07/2015)


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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

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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