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Pension fund payouts

In the case of Mathilda Wiese versus the Government Employees Pension Fund, Minister of Finance, The Pension Fund Adjudicator and Cornelius Johannes Marx (Western Cape High Court, Case No. 16893/09) the applicant was awarded a 25% share of her spouse's pension interest in the Government Employees Pension Fund.

She 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 had occurred.

In this case it was declared that the Government Employees Pension Law, Proclamation 21 of 1996, is 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 37 D(1)(d), (3), (4) and (5) and is invalid to the extent of that inconsistency. The declaration of invalidity was suspended for 12 months to allow Parliament to correct the defect.

The above decision however still did not apply to the wives of government officials and the wives of the workers in semi-government institutions such as the Post Office and Transnet. The reason for this was that the pension funds of these workers were controlled by other Acts.

At the end of 2011 the Government amended the legislature so that the wives of all government officials could be paid immediately after divorce the half of their husbands' pension. However, these amendments still did not affect institutions such as the Post Office and Transnet.

On 1 February 2012 the head of the Post Office, Michael Faasen, however handed in pleadings to Judge Mogoeng Mogoeng wherein it was averred that the Post Office already requested Mrs Dina Pule, Minister of Communication, that the law relating to the Post Office Pension Fund, be amended this year still.

Faasen's papers were served in a dispute wherein Mrs Pumla Ngewu, a wife of a post-office worker, asked that the situation relating to post-office workers and their pension funds not paying out immediately to their ex-spouses, be declared unconstitutional. Faasen asked that the application of the wife be postponed by a year so that Parliament could remedy this unconstitutional situation (date of writing article 1 February 2012). The Constitutional Court is hearing on 28 February 2012 oral evidence on the matter.

It is good to see that the laws relating to pension fund payouts are changing all the time. It is unconstitutional for ex-spouses of post-office workers to have to wait until their ex-spouse resigns or passes away before being paid out their share of the pension.

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