Can My Wife Claim Half My Pension?
Can My Wife Claim Half My Pension?
YES. In marriages or civil unions that are in community of property, each partner is entitled to a claim against the other’s pension fund. Therefore, your wife can claim half your pension amount. This claim will amount to half of the pension interest as of the date of divorce.
A claim under the Divorce Act can only be made if the husband, wife, or civil union partner is still an active member of the pension fund. Once they leave the fund, typically due to retirement or early withdrawal, the benefit is paid out to them, and there is no longer any pension interest or unaccrued benefit to claim. If the benefit is paid out before the divorce, it should be treated like any other asset in the separate or joint estate.
The Marital Systems in South Africa and Their Impact on Retirement Fund Claims
Marriages in Community of Property
- In marriages governed by a community of property, both spouses’ pension interests are considered part of their joint estate. Consequently, the non-member spouse is entitled to claim 50% of the member spouse’s pension interest as of the divorce date.
Marriages Out of Community of Property with Accrual
For couples married out of community of property with accrual, the value of one spouse’s pension fund is factored into the calculation of their estate’s value solely for determining accrual.
Marriages Out of Community of Property Without Accrual (Before November 1, 1984)
- In marriages before November 1, 1984, spouses maintain separate estates, and there is no automatic sharing of assets upon divorce unless a court orders a redistribution under Section 7(3) of the Divorce Act. In such cases, a pension interest belongs to the spouse’s estate and can be included in the asset pool if the court orders redistribution. Alternatively, the parties may mutually agree to share the pension interest in a settlement agreement.
Marriages Out of Community of Property Without Accrual (After November 1, 1984)
- In marriages after November 1, 1984, spouses retain their separate estates, and there is no sharing of assets at divorce. Any division of pension interests must occur by mutual consent. The parties can also decide to share the pension interest through a settlement agreement.
What is Pension Interest?
Pension interest is defined for all types of funds except preservation funds. For pension and provident funds, pension interest refers to the benefits a member would have received if their membership had ended due to resignation on the date of divorce. For retirement annuities, it is calculated as the total contributions made by the member up to the divorce date, plus simple annual interest at the prescribed rate. In the case of preservation funds, the benefit is what the member would receive if their membership were hypothetically terminated on the divorce date.
Claims under the Divorce Act can only be made if one spouse remains an active member of the pension fund. Once a member exits the fund, typically due to retirement or early withdrawal, they forfeit any pension interest or unaccrued benefits. If the benefits are paid out before the divorce, they are treated as assets within the separate or joint estate, which must be addressed during the divorce proceedings.
It is possible to assign a rand value to the non-member spouse instead of a percentage of the pension interest, provided that the amount does not exceed the value of the pension interest. However, it is not appropriate to award additional interest on the allocated pension interest since the Act already provides for growth on the allocated portion.
Interest only begins accruing a few months after the divorce if the pension interest is not paid within the legally prescribed time limits. In marriages or civil unions that are in a community of property, each partner is entitled to a claim against the other’s pension fund, amounting to half of the pension interest as of the date of divorce.
In marriages where the partners share community property, each individual has the right to claim the other’s pension fund. This claim will represent 50% of the pension interest calculated as of the divorce date. I hope the provided information is helpful, share your thoughts below in the comment section.