Divorce and Pension Funds –Landmark Case For Government Employees
In a divorce, where one spouse was awarded a portion of the pension benefits of the other spouse, who is a member of a Pension Fund in the private sector the waiting period for payment of such benefits would normally be 3 to 6 months. However, when the spouse is a member of a Government Pension Fund the spouse that was awarded such benefits had to wait until resignation, termination of employment or death of the other spouse before the benefits could be paid. This has now changed by a landmark decision handed down by Judge Bozalek in the Cape Town High Court in the matter of Wiese v Government Employees Pension Fund. The Goverment was granted a period of 12 months to change the legislation.
In this case it was declared that the Government Employees Pension Law, Proclamation 21 of 1996, was inconsistent with section 9(1) of the Constitution of the Republic of South Africa, Act 108 of 1996, insofar as it fails to afford to former spouses of members of the Government Employees Pension Fund the same rights and advantages as are afforded to former spouses of members of funds subject to the Pension Funds Act, 24 of 1956, more particularly those contained in section 37D(1)(d), (3) (4) and (5), and is invalid to the extent of that inconsistency.
The applicant was a former spouse of a member of the Government Employees Pension Fund (‘the Fund’), the first respondent, who, in March 2008, in terms of a settlement agreement which formed part of a divorce decree, was awarded a 25% share of her spouse’s pension interest in the Fund. The applicant was unable to realise this interest, however, since the legislation governing the Fund, unlike that governing private pension funds, only allows for the realisation of such an interest as and when an ‘exit event’ takes place in relation to the former spouse, such as resignation, termination of employment or death, and no such event has occurred.
As a result of financial hardship the applicant has at all time unsuccessfully sought to realize her share of her former spouse’s pension interest in the Fund. Having exhausted all other avenues she seeked an order that the governing legislation, the Government Employees Pension Law, Proclamation 21 of 1996, (‘the Law’) is inconsistent with s 9(1) of the Constitution of the Republic of South Africa and is invalid to that extent. She seeked, furthermore, an order whereby, broadly speaking, certain provisions in the Pension Funds Act 24 of 1956, (‘the PFA’) which allow for the immediate realization of pension benefits awarded on divorce to the non-member spouses of members of private pension funds, be read into the ‘Law’.
The applicant’s case was that differential treatment of a non-member spouse of a Fund member to that of a non-member spouse of a member of a pension fund governed by the PFA violates the affected party’s right, in terms of s 9(1) of the Constitution, to the equal protection and benefit of the law. More particularly, she contended that the applicant’s right of access to social security as entrenched in s 27 (1)(c) of the Constitution, and that of others in her position, was violated.
Given that the ‘clean break’ principle is applied to the divorced spouses of private pension fund members, there appears to be no rational reason why this should be withheld from their counterparts on divorce from a member of the Fund (or any other public pension fund, for that matter).
B.Proc; AD Dip L Law
Family Law Attorney
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