Understanding Your Retirement Options And Divorce

Over the past couple of decades much has been said about how a person's retirement savings become part of the joint estate, available for sharing with their spouse upon divorce.

What you need to know:

The non-member spouse need not wait until the member resigns or retires

The Pension Funds Amendment Act of 2007 and the Financial Services General Amendment Act of 2008 introduced the "clean break" principle – which means that from September 13 2007, the non-member spouse may receive the portion of the member's benefit from the fund immediately after the divorce and without having to wait for the member's exit event up on resignation, retrenchment, retirement, or death.

The non-member spouse can receive any portion of the member's pension interest

The non-member spouse's entitlement to a portion of the member's pension interest is not limited to 50%. Any portion up to 100% of the member's pension interest can be awarded by a court and paid by the fund to the non-member.

The fund will not pay if the member's employment is terminated before the date of divorce

The Divorce Act defines pension interest –which is the only thing that a fund can pay to a non-member spouse – to mean that there cannot be pension interest if the member's employment terminated before the date on which the decree of divorce is granted by a court. However, it does not mean that the non-member spouse cannot get anything simply because the member resigned just before getting divorced. The non-member spouse can still claim the portion awarded to him or her directly from the member spouse in a civil legal suit against the member.

Read the full article at: http://www.liberty.co.za/news-media/consumer-articles/Pages/understanding-your-retirement-options-and-divorce.aspx 

June 04 2019 By Liberty.co.za