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Personal Finance reports that following the recent gazetting of the Government Employees Pension Law Amendment Bill, Government Employees Pension Fund (GEPF) members will no longer be subject to its “debt model” in the case of divorce.
Instead, the GEPF says, the amendment provides for the reduction of pensionable service of the member equal to the value of the divorce settlement amount paid. Until now, a debt accrued to GEPF members when a portion of their pension was paid out by the GEPF in a divorce settlement. This created the perception that members could find themselves owing money to the GEPF when they retired. The amendment now ensures that, where the GEPF must pay out in a divorce settlement, rather than creating a debt, there will be an adjustment to the member’s pensionable service. This means that the benefit paid to the member on retirement will be decreased by reducing the members’ years of pensionable service, to take into account the portion of the member’s pension interest awarded to the spouse on divorce. Members who have more than 10 years of pensionable service will still be entitled to a lump sum and a monthly pension on exiting the fund, but it will be at a reduced value. The GEPF is developing and will be gazetting rules that will govern the implementation of the change. It is expected that the process will be finalised in July and the new rules will come into effect on 1 August.
- Read the full original of the report in the above regard on page 9 of Saturday Star Personal Finance of 29 June 2019
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