Co-habitation can you claim?
Divorce and Pension Fund Benefit.
You are entitled to your share of the value of your spouse's Pension / Provident Funds, Retirement Annuity and or Preservation Funds if you are married Ante Nuptial Contract (ANC ) with accrual. Once you have done your accrual calculation and have agreed to a percentage you will be able to claim your share. You will have to submit your court order with the settlement agreement to the administrators of the above funds. They will then have 60 days to either pay you your share in cash or transfer to your own fund.
Ensure that your settlement agreement states that you receive the percentage that you have settle on for example 50% or 60% of the fund value or pension interest. Be aware that as you are liable for the tax when you divorce is dated after October 2007.
The name of the Fund and the Policy Number or Member Number must be stipulated in your settlement agreement.
Make sure that your calculation of your share is based on the full value of your spouse's contribution, as well as the employer’s contribution. It is transferable/accessible on the date of the divorce order.
Your spouse’s employer may have a Provident Fund AND a Pension Fund or both. If so, claim your share from both funds. .
Does this apply to life partners or universal partnerships?
Deborah Escott-Watson points out that a universal partnership is not a marriage and accordingly cannot be dissolved by divorce. Therefore the Divorce Act does not apply to its dissolution.
A cohabitation agreement that deals with a division of pension interests would be of no force and effect as it would not be enforceable against the pension fund. Regardless, it is a good idea to provide for this in an agreement. It is inherently unfair that the pension fund can’t recognise this provision, and a court may come to your assistance.
Deborah concludes that cohabitees, even those who are able to prove the existence of a universal partnership and a joint estate between them, cannot share in the pension assets of their partners on termination of the relationship as is the case with people who have registered their unions in terms of the Marriage Act or the Civil Union Act. It will have to be decided by the courts whether or not this amounts to discrimination on the basis of marital status, but she submits that it does, especially as cohabitees are able to be awarded these assets on the death of their partners.
How do you ensure you can claim this benefit? Make sure you do pre-divorce financial planning. Sometime it might me financially smart to claim other assets like properties or discretionary investments.
Contact Christel at firstname.lastname@example.org for more advice or to arrange a personal consultation.