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Divorce Settlement: Pension payout

 

Obtaining full and correct pension fund details of the other spouse prior to finalising divorce settlement for purposes of claiming "Pension Interest" as defined in Section 7(8) of the Divorce Act of 1979, as amended, read with Section 37A (1) and 37D (4) of the Pension Funds Act, as amended.

It is very important for attorneys to establish what the correct name and number of a pension fund is prior to the divorce going through. If these details are not correctly inserted in the divorce settlement agreement, most pension funds would not pay out to the other spouse. 

If I am acting as the legal representative of one party in a case, and it appears that the other party has a big pension interest, I would insist on finding out directly from the pension fund all particulars relating to the pension interest. I would insist that the other attorney provides me with an authorization signed by their client allowing me to obtain information and documentation relating to the fund.

Such authorization may be drafted in the following fashion (strictly an example):

“AUTHORIZATION

I, Joe Public, Identity Number 000000 0000 000, do hereby authorize Mrs. Jane Doe from Doe Attorneys to obtain from the Trustees/Administrators of ABCD Retirement Fund all information and documentation that relate to my pension interest in the ABCD Retirement Fund, Fund Number 00/00/00000, Member Number ABCD0000000.

I consent to the Trustees/Administrators of the abovementioned fund to release such information and/or documentation to Mrs Doe.” 

Once the authorization has been signed, it is very important to follow up with the pension fund what the correct details of the fund are. I would insist on asking them to give an example of how they require the pension clause to be drafted in the divorce settlement agreement before getting the parties to sign the settlement agreement.

The consequences of the pension clause not being drafted correctly in the first place in the settlement agreement would no doubt be that the pension fund would not pay out to the ex-spouse who is entitled to the funds from the pension fund. One of the attorneys would then have to bring an application back to court to have the pension clause amended in the divorce settlement agreement.

This application referred to above would no doubt delay the pension fund paying out to the person entitled to the funds. Such application would take the format of a notice of motion accompanied by an affidavit wherein the applicant would give reasons for launching the application to amend the divorce order

In this application the applicant may for example state that he/she has been advised by for example Alexander Forbes that a certain clause in the settlement agreement does not comply with the definition of “Pension Interest” as contained in Section 7(8) of the Divorce Act of 1979, as amended, read with Section 37A (1) and 37D (4) of the Pension Funds Act, as amended, and that the final order of divorce is unenforceable against the fund. The applicant may then state that he/she wishes to apply to court that that clause be deleted and replaced with the appropriate clause.

I normally insist at the first consultation that my client gets me the name and number of his/her pension fund, as well as the pension fund of the other party. The pension interests held by the parties these days often form a large part of the estate of the parties. It is very important early on to have insight into the documentation and information relating to the pension funds.

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