[ADVISOR VIEW] In determining the pension interest, neither your marital status upon joining the fund nor the duration of your marriage will be taken into account: DevonCard - crueinvest. Divorce PersonalFinance
Of the many financial implications flowing from divorce, calculating the pension interest is undoubtedly one of the most complex. The term ‘pension interest’ is used in the context of divorce and is a notional amount based on the benefit that the member spouse would have received from their retirement fund at the date of divorce.
Defined in terms of the Divorce Act, pension interest is calculated at the date of divorce, keeping in mind that the member spouse must be a registered member of the retirement fund on the date of divorce. In the case of occupational funds , if the member spouse resigns from their employment or retires from the fund before the date of divorce, there is effectively no pension interest, and the benefit accrues to them – whereafter it will be dealt with as any other asset in the estate.
Out of community excluding the accrual after 1 November 1984: Each spouse retains their own estate and there is no claim for pension interest. However, divorcing spouses may agree to a division of the pension interest by mutual consent. Remember, the right to share in a pension interest is reserved only for those who are legally married, and cohabiting life partners enjoy no such right if and when their relationship terminates.
Retirement annuities: The total amount of the member’s contributions to the fund up to the date of divorce, together with the total amount of annual simple interest on those contributions calculated at the prescribed rate. It is important to note that the non-member spouse does not have the option of making a partial withdrawal and transferring the balance to a retirement fund. Also, where the pension interest is housed in a retirement annuity, the non-member spouse is required to transfer the funds to another retirement annuity – and not to a pension or provident fund – where a transfer is the option.