Question:
Good Day What happens to my retirement annuity if I get divorced?
Answer:
Faith, Your question lacks context, which is needed as it relates to a quite complex area in our law. In summary, the divorce decree/settlement determines how the marital assets are divided, and it will have to make specific mention of the retirement annuity. The divorce settlement itself will depend on your marriage regime. The decree will normally stipulate that the non-member spouse receives an agreed % of the "pension interest". The "pension interest" is defined as the sum of the member's contribution to the fund up to the date of the divorce plus simple interest at the prescribed rate. In terms of the clean-break principle, the non-member spouse will be entitled to cash in their share of the fund (and pay tax thereon) or transfer to another fund (tax-free). The following article, Divorce and retirement funds in South Africa, is an excellent and comprehensive discussion of this topic.
