Die verdeling van pensioenbelang by egskeiding : 'n praktiese benadering

Abstract

Since the inception of the Divorce Amendment Act in 1989 a lot has been said as to precisely how the non-member spouse's interest is calculated if two parties decide that the divorce court is their only alternative. What is the correct definition of "pensionable interest", what is included in the definition of "pension fund" and does a divorce order bind the pension fund to act according to the settlement agreement between the parties? The aim of this article is to offer a practical solution to this and a number of other vexed questions which can be used as a guideline by practitioners that roam the hallways of the divorce courts of this country. Looking at the definition of "pensionable interest" in the Divorce Amendment Act: in a nutshell it means the benefit that a member will be entitled to if he/she resigns from the fund on the day of his/her divorce. The non-member spouse, according to the Amendment Act, will be entitled to half of the member's now fixed benefit. No fund can be bound to pay more than this benefit to the non-member spouse. The non-member spouse does not have any claim for future contributions or to any growth or interest on this allocated amount. This constitutes a problem for the non-member spouse in that the future value of his/her money will be far less than on the date of the divorce. It is therefore essential, and in both parties' interest, that any settlement agreement between them is drafted carefully and correctly. Provision should be made for tax on the amounts because the member spouse will pay tax on the whole amount with a negative effect on the nett amount he/she will ultimately receive. The alternative to this potentially difficult and mostly unfair situation is that asset swaps can be used to avoid this potential chaos. This means that once the non-member spouse's benefit is calculated according to the definition referred to above, assets to the same value can be used instead to settle the matter. There will be no inflation, interest or tax problems and the member spouse can continue with his/her retirement fund without any burdens. This suggestion is also compatible with the "clean break" principle, which is an important consideration in divorce cases.