When Can a Spouse Claim Against Another Spouse’s Pension Fund in South African Law?

When Can a Spouse Claim Against Another Spouse’s Pension Fund in South African Law? Introduction Pension interests are often one of the most valuable assets accumulated during a marriage. South African law, therefore, regulates very specifically when and in what circumstances one spouse may claim against another spouse’s pension fund. While pension benefits are generally protected from attachment during the subsistence of a marriage, the law recognises certain situations in which fairness requires that a non-member spouse be granted access to a portion of those benefits. This article examines the primary instances in which a spouse may claim against another spouse’s pension fund, with reference to the applicable legislation and recent case law. Legislative Framework Claims against a spouse’s pension fund are principally governed by the Divorce Act 70 of 1979 and the Pension Funds Act 24 of 1956. Section 7(7)(a) of the Divorce Act provides that, for purposes of determining the patrimonial benefits to which spouses are entitled upon divorce, a party’s pension interest is deemed to form part of that party’s estate. Section 7(8) of the Divorce Act empowers a court to order a pension fund to pay or allocate a portion of a member spouse’s pension interest directly to the non-member spouse. These provisions must be read together with section 37D of the Pension Funds Act, which regulates lawful deductions from pension benefits. Divorce Is The Primary Instance For A Claim The most common and significant instance in which a spouse may claim against another spouse’s pension fund is upon divorce. During the marriage itself, no automatic right exists. The claim arises only after divorce proceedings have been instituted, and the court must determine how the parties’ patrimonial benefits are to be divided. Marriage In Community Of Property Where spouses are married in community of property, a joint estate exists. Upon the institution of divorce proceedings, section 7(7)(a) of the Divorce Act operates automatically to include the pension interest of the member spouse in the joint estate. Although the pension benefit is not paid out at that stage, its value must be taken into account when the joint estate is divided, and each spouse is generally entitled to an undivided half-share, absent a forfeiture order or agreement to the contrary. Marriage Out Of Community Of Property With Accrual In marriages concluded out of community of property subject to the accrual system, pension interests are relevant when calculating the growth of each spouse’s estate. The spouse whose estate shows the smaller accrual may claim a share of the difference, which may include a portion of the other spouse’s pension interest accumulated during the marriage. Marriage Out Of Community Of Property Without Accrual Where spouses are married out of community of property without the accrual system, no automatic right to a pension interest arises upon divorce. A claim may only exist if the parties expressly agree to the division of pension benefits in a settlement agreement or where a court grants a maintenance or redistribution order in terms of the Divorce Act. Section 7(8) Orders And Enforcement Section 7(8) of the Divorce Act provides the procedural mechanism through which a non-member spouse may enforce a pension-related claim. For a pension fund to be lawfully bound, the divorce order must clearly identify the specific fund and stipulate the portion or percentage of the pension interest awarded. If these requirements are not met, the fund may refuse payment. Claims Arising Upon Death A spouse may also benefit from a pension fund upon the death of the member spouse. Section 37C of the Pension Funds Act governs the distribution of death benefits and requires pension fund trustees to identify dependants and allocate benefits fairly and equitably. While a surviving spouse is recognised as a legal dependant, there is no automatic entitlement, and the final allocation remains subject to the trustees’ discretion. Maintenance And Pension Benefits Pension benefits are generally protected against attachment and execution. A living spouse’s pension fund cannot ordinarily be attached to satisfy maintenance claims. However, pension interests may be taken into account when determining spousal maintenance upon divorce, and limited deductions are permitted where expressly authorised by statute. MM v OM 2024 (3) SA 133 (GP) The judgment in MM v OM 2024 (3) SA 133 (GP) provides important clarity on the treatment of pension interests during divorce proceedings. The parties were married in a community of property. Divorce proceedings were instituted before the husband retired, although his pension benefit was only paid out after the divorce was finalised. The court held that section 7(7)(a) of the Divorce Act automatically vests the pension interest in the joint estate upon the institution of the divorce action. The fact that the member spouse ceased to be a pension fund member before the date of divorce and received payment only thereafter was irrelevant. The court further confirmed that a settlement agreement made by a court order is binding and cannot be ignored on the basis of alleged justus error. Conclusion South African law recognises limited and carefully regulated instances in which a spouse may claim against another spouse’s pension fund. Divorce remains the primary trigger for such claims, with pension interests forming part of the patrimonial benefits to be divided. Claims arising upon death and limited maintenance-related considerations are also statutorily regulated. Recent case law confirms the courts’ firm approach to preventing the manipulation of pension benefits and enforcing properly granted divorce orders. Accurate drafting of settlement agreements and divorce orders remains essential to ensure that pension-related rights are properly protected and enforceable. For more information or assistance, visit: https://schoemanlaw.co.za/services/family-law/ Janet Mc Intosh | SchoemanLaw IncAttorney: Civil and Commercial Litigation