Now that the 2-pot retirement system is here. It is important that we understand what it means in case of divorce.

1. The Savings Pot is likely to be cleaned out by those who are planning to divorce. You can read about how the Savings pot is funded here.

Withdrawing all the funds in the savings pot is allowed so administrators cannot be blamed for this.

Example:

Assume your spouse has R1,5 mil in their pension fund. The funds are split as follows:

• Savings pot balance = R500 000
• Retirement pot balance = R1 000 000
• Total Pension Fund value = R1,5 mil

Your spouse is well within their rights to withdraw the R500 000 in the savings pot so pension fund administrator will process the request to withdraw the funds.

The withdrawal will reduce the claim you can make to the pension from R1,5 mil down to R1mil.

TIP: As soon as you file for divorce, inform the employer / administrator of your spouse’s pension fund so they are aware that there are divorce proceedings in progress. If you fail to inform them or only inform them after your spouse has withdrawn the funds, this means you cannot blame the administrator for the withdrawal. Informing your spouse’s pension fund administrators will also help you ensure the following:

• that no loans are taken against the pension fund
• no withdrawals are made from the savings pot

When the divorce takes place, you can cash your cash your share of the pension benefits or invest them.

Contact ThuthukaSA for expert financial planning support.

Or you can WhatsApp us on +27 69 245 0228.