What happens to your Pension Fund after Divorce?

pension fund after divorce

Divorce does not only impact your emotional and physical well-being, it also has a huge impact on your financial position. One should never rush into dividing the pension and/ or retirement funds in a divorce settlement. It often occurs in divorce cases that the pension fund administrator rejects the settlement agreement on the basis that the clause dealing with the division of the pension fund interest is drafted incorrectly.

The Divorce Act and the Pension Fund Act 24 of 1956, make provision for the allocation of the unaccrued pension benefits to a non-member spouse upon divorce. A claim under the Divorce Act can only be lodged where the husband/ wife or the partner in a civil union is still a member. The marital system in South Africa consists of the following:

  • Marriages in community of property – the pension interest of the spouses forms part of their joint estate and the non-member spouse will be entitled to 50% of the pension interest at the date of the divorce;
  • Marriages out of community of property with the accrual – in these instances, the spouse’s pension fund value will be taken into consideration to determine the value of their respective estates for purposes of the accrual calculation only;
  • Marriages out of community of property without accrual before 1 November 1984 – the spouses retain their separate estate and there is no sharing of assets at divorce unless a court orders redistribution of assets in terms of Section 7(3) of the Divorce Act. The parties may also agree to share the pension interest in a settlement agreement;
  • Marriages out of community of property without the accrual after 1 November 1984 – in this instance, each party retains his/her assets as their sole and exclusive property and there is no division of assets at the divorce unless both parties agree to the division of the assets. The parties may also agree to share the pension fund interest in the divorce settlement agreement.

It is also important to note, with pension fund provisions in divorce settlement agreements, that you ensure that the correct name of the retirement fund is always stipulated in your divorce documents. If incorrect wording is used, it may result in the fund not paying out.

When considering the division of your estate, always consult with experienced attorneys. Do not hesitate to contact us, should you require legal assistance in the matter.


Charne Sebonka


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