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25 Oct 2010 08:45
If you’re divorced, or in the process of getting divorced, the issue of pension fund benefits is one you may want to think about. Remember that pension interest forms part of your spouse’s assets, so you may be entitled to a claim, depending on your marital regime.
I chatted to Geraldine Macpherson, legal marketing specialist for Liberty, who said that if you are married in community of property, or out of community of property but subject to the accrual system, you are entitled to a share of the benefits.
Macpherson says you are entitled to share in the pension fund interest on divorce.
So if your spouse has a retirement annuity, you are entitled to share in the return of contributions plus simple interest (currently 15,5%), dated from the inception of the policy to date of divorce.
The good news is, according to the “clean break” principle, which was applied to the pension benefits that accrue on divorce in 2007, you can access these funds at the date of divorce—previously, you had to wait until the member exited the fund, retired or passed away.
“In 2009, by way of legislation [the Financial Services Laws General Amendment Act, 22 of 2008], the principal was extended retrospectively to all applicable divorce orders, even those granted prior to this date. From a tax perspective, it is only since March 1 2009 that the non-member spouse has been liable for the tax,” says Macpherson.
How do you ensure you can claim this benefit? Macpherson has the following tips.
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