Division of Pension Rights in Divorce

The courts have ruled, with respect to both budgetary pensions and non-budgetary pensions, as follows:

• All social benefit rights accumulated through the work of either spouse during the marriage, such as severance pay, pension rights, managers' insurance rights, provident fund contributions, study fund contributions, etc., form part of the joint property, i.e. they are owned by both spouses.

• Each spouse is entitled to receive half of the social benefit rights from the other spouse's workplace for the period beginning on the date of the marriage and ending on the date of the divorce (according to the value of those rights as of the date the entitled party stops working and/or retires in the future).

Since pension funds are not "liquid", and only the member may withdraw them, and only upon reaching retirement age, in accordance with and subject to the rules of the specific pension plan (and the same applies, with the necessary changes, to other rights as the case may be), the spouse's right is actually realized only when the right matures.

Moreover, since divorce proceedings can take a long time, the entitlement to a division of assets, including pension rights, does not run until the date of the actual divorce (the get), but until the date on which the "rift" between the parties occurred, which may be, for example, the day divorce proceedings were opened, the day one of the parties left the home, and so on.

To determine the value of the social benefit rights, including pension rights, the court will usually appoint its own expert (an actuary), who will examine the pension rights of both parties in order to calculate their total value, with respect to the amounts accumulated during the marriage.

When the parties wish to divorce by agreement, it is advisable to turn to an agreed actuary to assess the total value of the social benefit rights (provident funds, managers' insurance policies, pensions, study funds, etc.), so that the parties know how to settle accounts between them.

In such a case, it can be agreed that the future funds will be capitalized, with the division made now, close to the signing of the divorce agreement, instead of waiting until each party's pension matures, which may take many years. In other words, if one party has surplus pension rights, they will pay a proportional share to the other party out of their own pocket (so as not to harm the pension and pay high tax) and/or as part of the overall settlement of the other joint assets (such as an apartment, car, savings, etc.).

It should be noted that, according to Supreme Court rulings, common-law spouses are also entitled to a division of assets and a division of social benefit rights, including pension rights.