Effects of Divorce on your Pension Fund

 

The question surrounding a spouse’s pension/retirement fund is always a delicate topic during divorce. It is important for one to know how either spouse’s pension fund will be affected and dealt with in the event of a divorce.

 

Below we explain how the pension fund is distributed and affected in terms of the different marital regimes:

 

Marriages in Community of Property

 

The pension interests of the spouses will form part of the parties’ joint estate and the non-member spouse will be entitled to claim 50% of the pension interest of the member as at the date of divorce.

 

Marriages out of Community of Property with the Accrual System

 

Where spouses are married out of community of property with the accrual system, each spouse’s current pension fund value will be taken into consideration in order to determine the value of his/her estate for purposes of only calculating the accrual.

 

One’s pension interest can be excluded in an ANC. The member spouse will have to expressly exclude the value of the pension fund or retirement annuity as at the date of marriage when drawing up the ANC.
Marriages out of Community of Property without the Accrual System

 

Spouses married out of community of property without accrual each retain their respective assets in their estate. Neither spouse will be entitled to claim from the others pension interest unless agreed upon mutually.

 


 

During divorce proceedings it is of vital importance that the correct name of the pension/retirement fund is used. The spouse’s pension fund details must be mentioned in the court order for the non-member spouse to claim and for that particular pension fund to endorse the divorce order.

 

A specified percentage or amount must be mentioned in the court order. It must be clear how the pension interest will be assigned to the non-member spouse.

 

Note that even though the divorce order may not mention the pension fund, this does not prevent the non-member spouse from claiming the pension interest. The court order will have to be amended/varied to include the member spouse’s pension fund details in order for the fund to endorse same and pay out the non – member spouse.

 

It is recommended to have the attorney contact the particular pension fund to request the specific wording they may require in the order to have it endorsed.

 

It is therefore important to ensure you appoint an attorney skilled in divorce law in order for the court to grant the appropriate order regarding pension interest.

 

Written by Maya Narsai Makan on 16 May 2018

 

MAYA NARSAI MAKAN specializes in Divorce and Family Law Matters and is an associate at Alan Levy Attorneys Notaries and Conveyancers.

enquiries@alattorneys.co.za/011 326 8050