When couples decide to separate, they are usually faced with: The issue of dissolving the partnership in their assets. Often, one of the most significant assets – in terms of their amount, but no less so, also in terms of the economic security that this asset is supposed to provide to each spouse upon retirement – is the pension savings, accumulated for the benefit of one or both of them; when, according to the law, these savings constitute joint assets that can be divided.
In February 2015, the “Law for the Distribution of Pension Savings Between Separated Spouses, 2014” (hereinafter: “the Law”) came into effect.
The purpose of this law is to bring about a change in the regulation and guaranteeing of the rights of separated and/or divorced spouses, in the pension and compensation benefits of their spouses, from whom they separated and with whom they shared periods of common life.
According to the law, various pension funds (including accumulated pension funds and budgetary pensions) must operate in such a way that the member’s former spouse’s share is guaranteed; in such a way that the share specified in the judgment (as detailed below) will be deposited in an account separate from the member’s account and will be out of the latter’s hands and control.
To explain the point, it should be noted that in a budgetary pension, the portion is determined as a percentage, while in a cumulative pension, the amount can be specified.
It should be emphasized that this law applies to savings for retirement only, whether budgetary or cumulative, and also to the accumulated right to compensation funds and/or sick pay; convalescence; jubilee grant, etc., social rights that accrue to the employee from the employer, but does not apply to funds accumulated in further education funds and provident funds that are not pension funds.
Regarding funds accumulated in further education funds and non-pension provident funds – the former spouse’s proportional share must be determined, and the latter is entitled to impose a lien on this share with the paying body (and it is desirable that he do so) and to have his share repaid directly from the paying body on the date of the specific fund’s benefit.
It should be emphasized that in order to go through the procedure efficiently, it is advisable and even recommended to consult with Editor Dean Sharon Segal, knowledgeable in the aforementioned subjects.
In order to reach the aforementioned situation, the following steps must be taken:
1. First, care must be taken to ensure that an appropriate calculation is made that takes into account and weighs the pension accumulation period and the period of joint life of the spouses; and as a result of this calculation, a certain fixed percentage or portion is obtained, which constitutes the former spouse’s share of the pension rights of the cohabiting spouse. It is highly desirable that this calculation be made by actuary.
For example: A man has a provident fund, which he began accumulating before the marriage, say – 5 years before the marriage and the joint life period – from the date of marriage until the date of separation – is 20 years; as a result, the accumulation period in the fund (until the date of separation) – 25 years, of which, as mentioned, a joint life period of 20 years.
The common rate is 20/25 = 80%.
The wife is therefore entitled to 40% = (80/2) of the amount accumulated for the husband in his pension savings, until the date of separation; and if the conditions detailed below are met, the husband’s pension fund will set aside this portion above, in a separate account, for the wife’s benefit (this will be an account to which additional payments/premiums can no longer be set aside).
This fund will be in the wife’s favor and will only be paid to her when the ex-husband’s retirement date arrives.
2. Secondly, it is necessary and essential to ensure a verdict, From Rabbinic Law Or in the Family Court, where the following details will be clearly stated and noted:
- The court that issued the judgment; the names of the parties and their ID numbers.
- The date of separation between the former spouses.
- The duration of their life together.
- The percentage of the portion of the pension and compensation funds that will be transferred to the former spouse.
3. The former spouse, i.e. the eligible spouse, must submit the appropriate judgment above to the paying body as soon as possible and fill out the appropriate registration application forms (see Section 3 of the Law).
4. Once a request for registration of the judgment is submitted, the paying body must immediately register a temporary warning note on the pension funds. This is provided that the judgment meets the criteria detailed above.
It should be noted that if a settlement agreement does not meet the above criteria, the paying body will notify the parties so that they can take action to correct it.
If the spouse does meet the criteria, the paying body will notify both parties within 14 days, and if no objection is received within 45 days, the warning will become permanent and the eligible spouse’s share will be transferred to a separate fund in his name.
It should be noted right away that the eligible spouse’s share cannot exceed 50% of the member’s existing pool of benefits at the time of separation. This is to prevent a situation in which the saving/member spouse is left without enough pension benefits to live on after retirement.
In addition, the eligible spouse’s share must be fixed and uniform, both with regard to the compensation component and the rewards component. It should be clarified that spouses may agree on the distribution of pension savings not in accordance with the law. However, in such a case, the distribution will not be made through the paying body, according to this law (Section 29(b) of the law).
In light of the above, as long as the eligible spouse’s share has not been set aside in a separate fund in his name, the saving spouse will be prevented from performing actions on his account (withdrawal, transfer, taking out a loan, etc.).
It is also important to note that the provisions of this law, including the payment of a survivor’s pension to the former spouse, may also apply to Divorce agreements and judgments that have already been approved and issued prior to the law’s application.
This is provided that two basic conditions are met: (according to Section 30 of the Law), one: that the saving spouse did not die before the day the law came into effect (06.02.15); and the second: “That the court or tribunal that issued the judgment determined, on or after the commencement date, that the duration of the joint period is at least 120 months (at least 10 years)“.
As a result, it is recommended and correct that former spouses who are entitled to their share of the other spouse’s pensions, act on judgments issued before the commencement of the law, if they apply to the Court of Appeal and/or the Court of Appeal, respectively, with an appropriate request to amend the judgment, in a manner that will be consistent with the requirements of the new law, as detailed above.
Afterwards, the couple must ensure that the amended marriage certificate is registered according to this law with the paying body. In view of the above, and in order to complete the procedure efficiently, it is desirable and even recommended Contact and consult personally with an experienced lawyer regarding the dissolution of a partnership..
