Lize de la Harpe, Senior Legal Advisor: Sanlam Life & Savings: Regulatory Unit

Introduction

As we know, retirement funds are strictly regulated. Section 37A of the Pension Funds Act, 1956 protects a members’ pension benefits and states that a fund may only make a deduction from such benefit if such a deduction is allowed in terms of the Pension Funds Act, the Tax Administration Act, the Income Tax Act and the Maintenance Act.

Section 37D of the Pension Funds Act sets out certain exceptions to the above rule, one of which relates to divorce orders. However, for a divorce order be enforceable against the fund, the divorce order must meet very strict requirements as set out in section 37D of the Pension Funds Act read together with the applicable sections of the Divorce Act.

These requirements are:

1. the order must specifically provide for the non-member spouse’s entitlement to a “pension interest” as defined
2. the relevant fund which has to deduct the “pension interest” must be named or identifiable,
3. the order must set out a percentage (%) of the member’s “pension interest” or a specific amount, and
4. the fund must be expressly ordered to endorse its records and make payment of the “pension interest”.

If the divorce order does not strictly meet the above requirements, it will not be in compliance with the Divorce Act read together with the Pension Funds Act and will therefore not be enforceable against the fund. The fund has no discretion in this regard since it is strictly bound by the provisions of the Pension Funds Act.

Jurisdiction of the Pension Funds Adjudicator

The Adjudicator’s main object, as set out in section 30D of the Pension Funds Act, is to dispose of “complaints” lodged in terms of section 30A(3). The office of the Adjudicator is a creature of statute – it has no inherent jurisdiction. Its jurisdiction is limited to “complaints”.

A “complaint” is defined in section 1 of the Pension Funds Act as relating to the administration of a fund, the investment of its funds and the interpretation of its rules alleging that:

• A decision of the fund or any person taken in terms of the fund rules was ultra vires (in excess of their powers) or an improper exercise of its powers,
• The complainant has or may sustain prejudice in consequence of the maladministration of the fund, whether by act or omission,
• A dispute of fact or law has arisen in relation to a fund between the fund or any person and the complainant, or
• That an employer who participates in the fund has not fulfilled its duties in terms of the rules of the fund.

Put simply: a complaint must firstly deal with at least one of the following three issues:

1. The administration of the fund; and/or
2. The investments of the fund’s assets; and/or
3. The interpretation of the rules of the fund.

In the Adjudicator’s Quarterly Digest of April 2023, the Adjudicator’s Senior Legal Advisor (Naheem Essop) wrote an article titled “OPFA jurisdiction and divorce orders”. In this article he summarized the Adjudicator’s view that the enforcement of a court order does not relate the administration of a fund, the investment of its funds, or the interpretation and application of its rules. As such, it fails to meet the requirements of the first part of the definition of “complaint” and therefore cannot be heard by the Adjudicator.

Furthermore, the Adjudicator cannot order a fund to do what it has already been ordered to do by the court itself, neither is the Adjudicator empowered to amend or vary a court order in order to rectify any perceived defect. These issues, therefore must be addressed with the court that issued the divorce order. Alternatively, the person must approach the FSCA to inform the FSCA that a fund is not complying with court orders.

Komape v Masakhane Provident Fund & Others (PFA33/2025) FST – 12 August 2025

The Applicant was married to Komape in community property. Komape was employed by Sibanye Stillwater and was, by virtue of his employment, a member of the Fund.

Komape and the Applicant were divorced on 15 March 2022. The divorce order provided that 50% of Komape’s pension fund interests would be awarded to the Applicant.

Sanlam initially administered the Fund, and in May 2023, this administration was migrated to NMG. When Sanlam was notified of the divorce proceedings in 2024, it advised the Applicant’s attorneys that the administration had been migrated to NMG. The Applicant then approached NMG and was informed that the divorce order did not meet the legislative requirements to be enforceable against the fund. The Applicant accordingly approached the court to have the divorce order amended so as to bring it in line with the requirements.

On 28 May 2024, the Applicant, through her attorneys, submitted an application for payment of the pension interest to Sanlam, who reiterated that they no longer administered the Fund. The Applicant finally submitted a claim form with supporting documentation to NMG on or about 25 July 2024. NMG advised the Applicant on 3 February 2025 that Komape had since received his withdrawal benefits from the Fund on 6 August 2024, and no payment could be made to her. Aggrieved, the Applicant lodged a complaint with NMG, which was not resolved to her satisfaction, whereafter she lodged a complaint with the Adjudicator.

The Adjudicator dismissed the complaint on the basis that it had no jurisdiction to hear the matter (i.e.: that the Adjudicator holds no powers to enforce or vary court orders). The Applicant then approached the Financial Services Tribunal for reconsideration of the decision in terms of section 230 of the Financial Sector Regulation Act, 2017.

The Tribunal reiterated that the Adjudicator’s jurisdiction is limited to matters which fall within the definition of “complaint” as set out in the Pension Funds Ac. It held that it was apparent from the complaint to the Adjudicator and the reconsideration application that the Applicant was, in essence, requesting the Adjudicator and then the Tribunal, to enforce her divorce order. Court orders are enforced by writs of execution or contempt of court proceedings, not by the Adjudicator. In the circumstances, it held that the Adjudicator was correct in finding that the complaint was not within its jurisdiction. The application for reconsideration was accordingly dismissed.

Conclusion

A staggering number of divorce orders received by funds do not meet the requirements to be enforceable against the fund in question.

It is therefore important for parties getting divorced to ensure that they appoint attorneys with the necessary pension fund law expertise – divorces are not only costly, but also time consuming. The last thing the parties want is to end up with is an unenforceable pension interest claim.

ENDS