Media release from the Women’s Legal Centre
Inroads made in the constitutional right to equality between spouses during divorce
PRIMROSE MARTIN v TRANSNET RETIREMENT FUND
Before the clean break principle was introduced, divorcees had to wait until their former spouses resigned or retired from their funds to get access to their portion of the pension interest awarded to them in terms of a divorce order.
The Pension Funds Amendment Act of 2007 introduced the clean break principle for the treatment of retirement fund benefits on divorce with the amendment of Section 37D which provides that retirement funds can deduct divorce orders from a member’s benefit and pay it to the non-member spouse or a retirement fund of his or her choice.
The portion awarded to a non-member spouse remained in the fund for what was often many years, and the non-member spouse did not enjoy any growth in the portion awarded to him or her. The clean-break principle allows the non-member spouse to receive her benefit on divorce or transfer his or her portion ofthe pension interest to another retirement fund and to benefit from the growth on the money.
The clean break principle applies to all private pensions, that is, pensions registered with the Registrar of pension funds and regulated in terms of the Pension Funds Act, 24 of 1956. However up until recently the clean break principle did not apply to government pension funds, most of which are governed by their own independent pieces of legislation.
Ms Martin and her ex-husband finalised their divorce in August 2010. Part of the settlement agreement entitled Ms Martinto 50% of her ex-husband’s pension interest in terms of the final order of divorce. However, the administrators of the Transnet Retirement Fund advised that she would only be entitled to secure the benefit when her ex-husband ended his employment and exited the fund according to the rules of the fund.
Ms Primrose Martin approached the Women’s Legal Centre (WLC) to challenge her right to receive payment of her interest on the date of divorce. The trustees amended their rules on 08 March 2012 to make provision for our client to be paid her benefit.
“This is a significant outcome for the WLC as it indicates that we are making inroads when it comes to the clean break principle and the constitutional right to equality between spouses during divorce,” says Hoodah Abrahams-Fayker, Attorney for the Women’s Legal Centre.
In July 2011 the Cape High Court declared the law governing the Government Employees Pension Fund (GEPF) inconsistent with the constitution gave the government a year to remedy the situation. The Constitutional Court confirmed theCape High Court order in March this year and the Act has been amended accordingly.
“There is a presently a decision pending in the Constitutional Court relating to thePost Office Retirement fund on the same issue which is set down for 7 February 2013. It is expected that the rules will be amended before then to include the clean break principle,” concludes Abrahams-Fayker.
For more information:
Women’s Legal Centre
7th Floor Constitution House
124 Adderley Street
Tel: (021) 424 5660
Fax: (021) 424 5206
E-Mail: hoodah at wlce.co.za