Everyone's Guide to Divorce and Separation by Bertus Preller

Author:Bertus Preller
Language: eng
Format: epub
ISBN: 9781770225305
Publisher: Penguin Random House South Africa
Published: 2013-10-15T00:00:00+00:00

How is pension interest calculated?

Pension interest in a retirement annuity fund is defined in the Divorce Act as ‘the total amount of that party’s contributions to the fund up to the date of divorce, together with the total amount of annual simple interest on those contributions up to that date’. The Pension Fund Act provides that the ‘total amount of annual simple interest payable in terms of the definition may not exceed the fund return on the pension interest assigned to a non-member spouse in terms of a decree granted in terms of the Divorce Act’. So, the non-member spouse is entitled to claim the lower of either annual simple interest (currently at an annual rate of 15.5 per cent) or fund return on the pension interest allocated to the non-member in terms of the divorce order.

The non-member spouse is only entitled to the accrual of fund return on his/her share of the pension interest once he/she has submitted the court order to the fund and has made an election as to whether his/her share of the pension interest should be paid directly to him/her or transferred into another fund until the date of payment.

In a preservation fund, if a once-off withdrawal has already been made prior to the divorce, the value of the remaining investment (which will usually be represented by the death or disability benefit) can be used to determine the termination value.

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