Divorce and the Pension fund clause
When getting divorced and you seek to claim a portion or half of your spouse’s pension, your attorney will advise you to get your spouse’s pension number as well as the name of his/her pension fund. It is imperative that these details are indicated correctly in a divorce settlement agreement. A pension fund very often forms a major part of a person’s assets. Different pension funds work differently.
A typical way in which a pension clause is formulated in a divorce settlement agreement would be as follows:
“The Plaintiff is a member of the [relevant fund name] Pension Fund;
Aforementioned pension fund is a pension fund as intended in Subsection 1 of Act 24 of 1956;
In terms of Subsection 7(7)(A) of the Pension Fund Amendment Act, the Defendant’s interest in the aforementioned pension fund is considered to form part of the joint estate;
In terms of Subsection 7(8) of Act 70 of 1979 and Section 37D(1)(E) of the Pension Fund Amendment Act, this Honourable Court is able to make a decree of divorce in which it is ordered that:
Any part of the Plaintiff’s interest in the aforementioned pension fund be paid to the Defendant by the fund within sixty days from date of divorce herein.
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A caveat be made in the records of the aforementioned pension fund that the relevant interest in the pension fund be paid to the Defendant within sixty days from date of divorce.
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Based on the above, the Defendant is entitled to at least 50% of the Plaintiff’s interest in the aforementioned pension fund.”
It is important as indicated above to make mention that a caveat be made in the records of the pension fund that the relevant interest in the pension fund be paid.
One should ensure that the pension fund clause is properly formulated in the agreement of settlement. If it is not, the consequence would be that after the divorce the pension would not pay out to the non-member and a further application would have to be brought to court for the amendment of the divorce order. This would lead to unnecessary costs being incurred.
written by Pete Baker, a Cape Town attorney.
Divorce-related articles
Divorce and Pension Fund payouts
Co-Guardianship of minor children