Dividing assets during divorce is seldom straightforward, especially when it comes to pension funds. For many couples, retirement savings represent one of the largest assets in the marriage, and deciding how these funds are divided can be complex—legally and financially. South African law provides a structured framework for how pension interests are shared, but the process is often misunderstood or mishandled.

In this article, our divorce attorneys explore the legal framework governing the division of pension funds during divorce, outline the key challenges involved, and explain what both member and non-member spouses need to understand when facing this issue.

Pension Fund Division in Divorce

Relevant Legislation

The division of pension funds in divorce is primarily regulated by:

• The Divorce Act 70 of 1979
• The Pension Funds Act 24 of 1956
• The Government Employees Pension Law, 1996 (for GEPF members)
• The Income Tax Act 58 of 1962 (for tax implications)

The cornerstone of this framework is the “clean-break principle”, which allows for pension interests to be split at the date of divorce and for the non-member spouse to either withdraw their share or transfer it to another fund.

When Is a Pension Divided in Divorce?

Whether a spouse is entitled to a portion of the other’s pension depends on the marital property regime:

In Community of Property

All assets (including pension interests) are shared equally. Each spouse is entitled to 50% of the other’s pension fund accumulated during the marriage.

Out of Community of Property With Accrual

The spouse whose estate grew less during the marriage is entitled to a portion of the difference in accrual. Pension funds are considered part of that accrual unless specifically excluded.

Out of Community of Property Without Accrual

Each spouse retains their own assets—including pension funds—unless otherwise agreed upon in the divorce settlement.

How Is a Pension Divided?

Step 1 - Determine the Value of the Pension Interest

At the date of divorce, the pension fund administrator calculates the “pension interest”—which is the total value of the member’s fund up to that point. This value depends on:

• The type of fund (retirement annuity, provident, pension)
• The contributions made
• Any interest accrued

Step 2 - Include the Provision in the Divorce Order

For the non-member spouse to claim a share of the fund, the divorce order must:

• Specifically refer to the fund by name
• Clearly state the percentage or amount awarded
• Authorise the fund to make the deduction in terms of Section 37D(4) of the Pension Funds Act

Step 3 - Payment or Transfer to Non-Member Spouse

Once a valid order is submitted, the non-member spouse has two options:

• Withdraw the benefit (and pay tax)
• Transfer it to another approved retirement fund (tax-deferred)

This step concludes the “clean break,” meaning the non-member spouse has no further claim to the member’s future pension growth.

Division of Government Employees Pension Fund (GEPF)

Unique Treatment

The GEPF operates under its own rules (not the Pension Funds Act), and as such, it presents unique challenges:

• The pension interest is not directly transferable.
• The divorce debt model is used: the GEPF pays the non-member spouse their share, and the member’s future benefits are reduced accordingly.
• Tax is deducted upfront from the non-member spouse’s payout.

Dividing GEPF pensions in divorce requires precision in the divorce order and awareness of its long-term effects on the member’s retirement.

Common Challenges in Pension Fund Division

Incorrect or Vague Divorce Orders

One of the most common reasons for delays or failures in the payout is that the divorce order does not comply with the Pension Funds Act requirements. For example:

• Failing to name the fund correctly
• Not specifying the portion awarded
• Omitting reference to Section 37D

This often results in a rejection of the order by the fund and delays for both parties.

Administrative Delays

Even with a valid order, administrative processing by some pension funds can take several months. The non-member spouse may also need to complete withdrawal or transfer forms, submit banking details, and provide tax information.

Tax Implications

Withdrawing pension funds attracts tax unless the benefit is transferred to another retirement fund. Many non-member spouses are unaware of this and receive less than expected. For GEPF payouts, tax is withheld automatically.

Lack of Financial Advice

Many spouses accept or reject pension splits without understanding the long-term financial impact. A pension may be a valuable asset—especially if the couple has few other shared assets. Without legal and financial advice, the non-member spouse may make costly decisions.

Disputes Over Accrual Values

In marriages with the accrual system, disputes may arise over the calculation of each estate’s growth, especially if one spouse tries to hide or undervalue assets.

Protecting Yourself During Pension Division

If You’re the Member Spouse:

• Disclose your pension fund value honestly and early in the proceedings.
• Consult your fund administrator or HR department about current valuations.
• Ensure that any agreement complies with the law and protects your retirement stability.

If You’re the Non-Member Spouse:

• Insist that the divorce order includes the correct legal wording.
• Understand whether you’re withdrawing the benefit (taxable) or transferring it (not immediately taxable).
• Ask for financial planning advice—your future income may depend on it.

Why Proper Legal Guidance Matters

Splitting a pension fund is not automatic, and it isn’t always straightforward. From ensuring that the divorce order is enforceable, to protecting your financial future, getting this part of the divorce right is critical.

Errors in this stage can delay payouts for years or result in permanent loss of benefits.

Van Deventer & Van Deventer Inc. – Strategic Legal Support for Divorce and Pension Division

At Van Deventer and Van Deventer Inc., our divorce attorneys help clients navigate the legal and financial complexities of divorce with precision and foresight. Our team ensures that:

• Pension interests are accurately valued and divided
• Divorce orders are correctly structured and enforceable
• Your retirement future is protected
• You receive or retain what you’re legally entitled to

Whether you are a GEPF member, a non-member spouse, or someone entering negotiations, our attorneys bring clarity and legal strategy to your case.

Divorce is never just about separating—it’s about securing what comes next. Let us help you do it right.

Contact Van Deventer and Van Deventer Inc. for trusted, experienced assistance with your divorce and pension fund division.