Pension plain: What to do if your spouse’s fund does not want to pay the pension interest during divorce?

A divorce is a traumatic, emotionally and financially draining process. The good aspects of the past relationship are forgotten, and the bad take centre stage. In a best-case scenario, the parties and their attorneys can come to a workable solution regarding the division of assets.

If not done right, the division of the pension interest of a fund member and the payment of the agreed-upon portion of the pension interest of the member to the non-member spouse can cause frustrations that overshadow all other divorce-related frustrations.

In terms of the Divorce Act, the pension interest of a retirement fund member is, in almost all cases, a deemed asset of the estate of that fund member that can be divided at divorce. The Divorce Act defines pension interest as the withdrawal benefit that the member of that fund would have been entitled to if he or she resigned from employment on the date of divorce.

From  September 1, 2024, the Pension Funds Act will introduce a definition of pension interest that equates to the member’s individual account or minimum individual reserve as at the date of divorce, he or she still has a pension interest in the fund that can be divided between the parties if the money is still in the fund on the date of divorce. 

The old trick of resigning before the date of divorce to withdraw money from the fund and avoid splitting it with your spouse is no longer as effective as it once was.  Non-member spouses who are in the divorce process are increasingly obtaining interdicts against the funds of spouses, preventing them from paying out any benefits to the member spouse before the divorce order is granted.

The divorce court has the power to order a retirement fund to pay a portion of the pension interest of the member spouse to the non-member spouse. The order against the fund must correctly identify the fund and order that specific fund to make payment of pension interest to the non-member spouse. If the payment order is valid and enforceable against the fund, the fund must make payment when called upon to do so by the non-member spouse.

What should the non-member spouse do when he or she presents the divorce order to the fund and demands payment, but the fund does not want to give effect to the court order by making payment? This question was answered by the Financial Services Tribunal in the case of Komape v Masakhane Provident Fund.

Ms Komape got divorced from her husband, a member of the Masakhane Provident Fund, in March 2022. She submitted her claim form for 50% of his pension interest and the divorce order to the administrator of the fund in July 2024. In February 2025, the fund administrator informed Ms Komape that the fund paid the full withdrawal benefit to her ex-spouse in August 2024. The fund, therefore, did not make provision for the payment that was ordered in terms of the divorce order to pay to Ms Komape.

Aggrieved with the decision of the fund, Ms Komape lodged a complaint with the office of the Pension Funds Adjudicator (PFA) to obtain an order from the PFA to force the fund to make payment to her. The PFA dismissed the complaint on the grounds that it did not have the jurisdiction to adjudicate the matter. Ms Komape then approached the Financial Services Tribunal with a request to review the decision of the PFA.

The Financial Services Tribunal confirmed that neither the PFA nor the Tribunal had the power to enforce a court order, as requested by Ms Komape, and that court orders can only be enforced by writs of execution or contempt of court proceedings. The only way Ms Komape can therefore force the fund to make payment of 50% of her spouse’s pension interest was to go back to the court to obtain a second order from the court to force the fund to make payment. As the fund was aware of the divorce order and Ms Komape’s claim before it processed the payment of the withdrawal benefit to its member, the fund will not be in a position to avoid liability on the basis that payment of the full withdrawal benefit was already made to the member.

In terms of the Pension Funds Act:

1. The non-member spouse must submit the divorce order to and claim payment from the fund.
2. The fund must, within 45 days of receiving the request from the non-member spouse, determine if the divorce order meets the requirements of the Divorce Act. If it does not meet the requirements, the non-member spouse must be informed. The non-member spouse can then apply to the court to amend the divorce order or lodge an application at the court to compel the fund to make a payment.
3. If the fund finds that the divorce order meets the requirements, it must give the non-member spouse 120 days to elect how the pension interest must be paid.
4. The fund has an obligation to pay or transfer the pension interest, as per the election of the non-member spouse, within 60 days of receiving the election. 

When it comes to divorce, the onus to ensure payment of the agreed-upon portion of the pension interest by the fund rests solely on the non-member spouse. It is an asset of your ex-spouse that was allocated to you in terms of the divorce order and you must decide if you want to incur the legal costs of enforcing the order against a fund that does not want to make payment to you or that neglected to make payment to you before making payment to the member when he or she left the fund.   

* Ladouce is a pension fund lawyer and the author of the book ‘Pensions for Palookas’.

PERSONAL FINANCE