Consideration of late marriage clauses when assessing pension obligations

Overview

The valuation of pension obligations is subject to a number of estimation parameters, which typically include an assumption regarding the probability of payment of survivors' benefits. The use of the marriage probabilities tabulated in the Heubeck 2018 G mortality tables is recognized for tax purposes by the Federal Ministry of Finance (BMF) circular dated October 19, 2018 (IV C 6 – S 2176/07/10004 :001).

In recent tax audits, there has been an increasing trend for pension provisions for pension commitments containing a late marriage clause to be reduced across the board. Against this background, the working group "Biometric Accounting Basis for Employers' Pension Obligations" of the Pensions Committee has examined methods for the actuarial consideration of late marriage clauses – in particular, an approach presented in spring 2024[1] – and presents the results in this report.