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Divorce order must be properly worded

Personal Finance
Your attorney must draft your divorce order carefully if you want to be certain that you will receive a share of your spouse’s retirement benefits after your divorce.

Badly worded divorce orders continue to prevent divorcees from receiving their fair share of a retirement benefit, because funds cannot implement these orders.

Lawyers who are members of the Pension Lawyers Association are some of the best experts on how to draft a divorce order. They recommend that you use the guideline wording published by the Association for Savings & Investment South Africa (Asisa):

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“The parties record that the defendant is a member of the XYZ Pension Fund (‘the fund’).”

“The parties agree that the plaintiff shall be entitled to percent of the defendant’s pension interest in the fund as defined in section 1 of the Divorce Act 70 of 1979.” (Note: if the fund is a preservation fund, the wording should be “as defined in section 1 of the Divorce Act, read with section 37D(6) of the Pension Funds Act 24 of 1956”.)

“The fund must pay or transfer the assigned portion of the pension interest in terms of the provisions of section 37D(4) of the Pension Funds Act 24 of 1956 to the non-member spouse or an approved fund on her behalf.”

In an article published in 2014, Asisa said its members, which include life assurance companies that administer retirement funds, formulated the following tips for divorcees and their attorneys:

The divorce order must be issued by a High Court, regional court or divorce court.

The member must belong to the fund and still be in service on the date on which the divorce order is granted.

It must be possible for the marriage or relationship to be dissolved in terms of the Divorce Act.

The fund or funds against which the claim is made must be correctly named in the final divorce order.

The order must assign a rand value or percentage to the pension interest, as at date of divorce, to be awarded to the non-member spouse.

The order must refer to a “pension interest”. Phrases such as “pension benefit”, “pension fund”, “value”, “benefits”, “fund interest” or “interest in the fund” must be not be used, because “pension interest” has a specific meaning in law and is the correct term.

The fund, not the member spouse, must be ordered to make payment to the non-member spouse. It is not sufficient for an order to state only that an endorsement must be made in the records of the fund.

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