The non-member spouses’ right to claim retirement benefits during divorce : a call for law reform

Abstract

This dissertation discusses the South African legal position regarding the sharing of the member spouse’s retirement benefits during divorce. It investigates whether the current law regulating the sharing of member spouses’ retirement benefits adequately addresses the non-member spouses’ rights to benefit from member spouse’s accrued retirement benefits during divorce. Traditionally, the non-member spouses’ rights to benefit from the member spouses’ retirement benefits during divorce was not recognised in our law. This dissertation highlights the practical plight that is encountered by non-member spouses’ whom their husbands are members of retirement funds that are subject to the PFA and the GEPL. Before, 1989, non-member spouses would only benefit from their member spouses’ retirement benefits once they have accrued. These retirement benefits would only accrue once the member spouse has resigned, retired, been retrenched, reached certain age and been dismissed. Irrespective of the applicable matrimonial principles governing the spouses’ marriage, retirement benefits were not regarded as assets forming part of the member spouse’s estate, or joint estate when married in community of property. Our courts have timeously failed to adequately protect the existing interplay between pension law, matrimonial law and the divorce law in order to protect the rights of non-member spouses vis-à-vis the sharing of their member spouses’ accrued retirement benefits during divorce. In most cases, our courts disregarded the impact of matrimonial principles for purposes of the inclusion of retirement benefits during the division of the spouses’ matrimonial assets during divorce. However, after the introduction of the concept “pension interest” and sections 7 (7) and 7 (8) in the Divorce Act, it is now possible for the courts to deem the member spouses’ pension interest as an asset of the member spouses’ estate and/or joint estate respectively. Non-member spouses had to wait for long before they could access claimed portions of their member spouses’ retirement benefits. To curb this challenge, the legislature amended the PFA in 2007 by introducing the clean-break principle in the PFA through section 37D. Later in 2011, the clean-break principle was introduced in the GEPL through section 24A. Recently, it has emerged that member spouses are using their accrued retirement benefits to purchase

living annuities without the non-member spouse’s written consent. This practice clearly results in the deprivation of the non-member spouses’ rights to claim and receive portions which they may be entitled to during divorce. This dissertation argues that the legislature should consider amending the PFA, GEPL or the Divorce Act to statutorily protect and recognise the non-member spouses’ rights to claim the member spouses’ accrued retirement benefits during a divorce. Alternatively, the legislature should consider enacting specific legislation that will curb these challenges during divorce.