Possibly the last thing people consider when going through the emotional trauma of a divorce is how it will effect their retirement planning.
The reality after recent legislation changes are that a non member ex spouse is able to enjoy the growth benefits and is entitled to claim his/her portion of the benefit immediately. This also applies to divorces which occurred prior to the legislation and can be claimed directly from fund.
Marriage often sees two people working together to create a financial future together, catering for their needs as a couple. When a marriage breaks down the implications on the financial future of both people individually are quite different and in many cases destructive where acrimony exists and large sums of money are paid in divorce proceedings. This is true for not only married people but those in long term relationships where partners are able to claim against your assets and income as common law spouses.
There are essentially two scenarios in which a spouse may claim against your retirement benefits directly from the fund, those being when you are married in community of property or by ante-nuptual contract with the accrual system. In order to qualify to claim directly from the fund the order needs to meet the following criteria.
- The court must award to the non-member spouse a percentage of the member’s pension interest
- The retirement fund must be named or able to be identified
- The retirement fund must be ordered by the court to make an endorsement on the members plan to ensure that the awarded part of the pension interest is paid to the non-member ex-spouse
Always consult a financial planner or financial advisor in matters of retirement benefits and potential divorce, a simple adjustment of your portfolio can make a significant difference to how your estate is viewed in the eyes of the courts,