By Hannah Mower
In South Africa, retirement pension benefits play a crucial role in divorce settlements. Here’s a detailed overview of how they are typically managed:
- *Retirement Funds as Marital Property*: Any retirement benefits accrued during the marriage are considered marital assets. This means they can be divided upon divorce, depending on the circumstances, ie, the regime on which the parties are married into.
- *Pension Funds Act*: The non-member spouse (the one not contributing to the pension) is entitled to a portion of the pension benefits, which can be formalized through a court order or a settlement agreement (where parties are married in community of property or out of community with the inclusion of the accrual system).
- *Types of Orders*:
– *Pension Sharing Order*: This allows for a direct transfer of a portion of the pension fund benefits to the non-member spouse.
– *Clean Break Order*: This involves a lump sum payment to the non-member spouse, settling their claim on the pension benefits.
- *Valuation of Benefits*: Before dividing the pension benefits, the retirement fund’s value must be determined. This often requires a financial expert to assess its worth.
- *Impact on Future Benefits*: Dividing pension benefits may affect both parties’ future retirement income. The non-member spouse should consider how this division impacts their long-term financial security.
- *Legal Advice*: It’s advisable for both parties to seek legal counsel when navigating the division of retirement benefits during a divorce. This ensures their rights are protected and that they receive a fair settlement.
Understanding these aspects can help individuals make informed decisions during the divorce process.
