What Is The Clean-Break Principle?
The GEPF introduce the “clean-break” principle for the division of pension benefits. On 14 December 2011 the GEP Law Amendment Act 2011 amended the law to provide for the implementation of the “clean-break” principle. This means that former spouses of members contributing to the Government Employee Pension Fund (GEPF) can now claim their share of the fund as stipulated in their divorce order and don’t have to wait until retirement, resignation or death.
Why Is This Important When You Get Divorced?
Pension interest forms part of your spouse’s assets and depending on your marital regime, you may be entitled to claim a share. Read more.
How Do You Ensure You Can Claim This Benefit?
- The percentage or exact amount of the pension interest you are claiming must be agreed upon and stipulated in the divorce settlement. Stating “the joint estate must be divided” or “a share of the pension” will not qualify you to claim.
- The name of the Fund must be stipulated; in this instance, “Government Employee Pension Fund (GEPF)”
- Direct the Fund to pay the ex-spouse pension interest; and
- Make certain to send an original certified copy of the Final Divorce Decree and Settlement with all other supporting documents to the GEPF
It is imperative that these details are correctly stipulated in a divorce settlement agreement.
What Citation Must Be Used To Ensure You Have A Valid Claim?
A typical way in which a pension clause is formulated in a divorce settlement agreement would be as follows:
“In terms of Section 7(7) and 7(8)(a)(i) and (ii) of the Divorce Act 70 of 1979 it is agreed that 50% of the pension interest, due and assigned to the Plaintiff/Defendant, held in the Government Employees Pension Fund be paid to the Defendant/Plaintiff by the aforementioned fund when any such pension benefits accrue in respect of the Plaintiff/Defendant, up to the date of the granting of the Decree of Divorce. An endorsement to this effect must be made in the records of the abovementioned Pension Fund, member number XXXXX.”
It is important as indicated above to make mention that an endorsement be made in the records of the pension fund that the relevant interest in the pension fund be paid.
What Happens If The Wording Is Incorrect?
Failure to formulate the clause properly in the settlement agreement and/or Divorce Decree will only result in an “no endorsement” and the divorce interest not being paid to the non-member. Further application for and amendment of the divorce order will have to be brought to court and will result in unnecessary cost and time delay.
The GEPF only acts on a correct formulated Divorce Decree and/or Settlement and can only pay the non-member once a court order is presented.