If you and your spouse are married in community of property and you get divorced, your spouse’s pension or provident fund savings are automatically deemed to be part of your joint estate, a recent Supreme Court of Appeal judgment has confirmed. This means that your spouse’s savings (his or her fund value at the date of divorce – or “pension interest”, as it is known) do not have to be specifically mentioned in your divorce settlement agreement for you to be entitled to your share.
Until the judgment, Ndaba vs Ndaba (SCA 2016), there was some confusion about whether a person married in community of property could claim a portion of his or her spouse’s pension interest unless it was spelled out in the divorce agreement.
The Divorce Act was amended in 1989 to introduce the “clean-break” principle, whereby a fund member’s pension interest is shared at the date of divorce. The changes to the Act stated that, “in the determination of the benefits to which the parties to any divorce action may be entitled, the pension interest of a party shall … be deemed to be part of his or her assets".
Although there is now clarity on this issue, for the pension fund in question to effect the claim and make a payment to you as a non-member spouse, the divorce agreement must nonetheless comply with the provisions of the Pension Funds Act regarding the deduction and payment of the pension interest. A pension fund will act only on a correctly-worded court order, or decree, arising from such a divorce agreement.
In a recent article on the case, Kara Barnard, an associate in the pension law department at Shepstone & Wylie Attorneys, says: “The Supreme Court of Appeal has now confirmed that a non-member spouse does not lose the right to claim [his or her] share of pension interest of the member spouse, despite the divorce court not making an order in terms of Section 7(8) of the Divorce Act.
“If the non-member spouse seeks to claim a share of pension interest, [he or she] is required to seek an amendment to the decree of divorce of the settlement agreement before requesting payment from the [pension] fund. Retirement funds should ensure that each decree of divorce or settlement agreement that is received complies with the provisions of Section 7(8), as it is only then that the fund is required to effect payment to the non-member spouse.
“Should the order not comply with these provisions, the fund is to request the non-member spouse to seek an amendment to the decree of divorce, as they are now able to do so post divorce proceedings.”
In other words, if you didn’t receive a portion of your ex-spouse’s pension interest because it was not mentioned in the divorce agreement, you can still claim your portion by getting the court order arising from your divorce agreement amended.