Overview of the legislative protection of retirement benefits against transfer, reduction, hypothecation and attachment in South Africa

Abstract

This article demonstrates that the retirement industry is fragmented, with different pieces of legislation which contain differently drafted provisions addressing the same issue. In particular, it illustrates that several pension statutes provide protection against creditors to retirement benefits held by retirement funds. Further, that, while held in retirement funds, retirement benefits are protected from assignment, transfer, cession, hypothecation, pledge, reduction, attachment and execution. Furthermore, that some of these transactions appear in some of the provisions of the pension statutes whereas they do not do so in similar provisions of other pension statutes. This article argues that the differences in the way similar provisions in different pension statutes are drafted leads to the development of confusing jurisprudence regarding the protection of members’ retirement benefits, which needs legislative intervention. This article calls for a uniform approach across all pension statutes regarding the protection of pension benefits against members’ creditors. This article further examines whether retirement benefits can be declared realisable property to enable creditors to enforce payment of their debts from these benefits. It illustrates that while it is clear that legislative protection of retirement benefits is available before these benefits accrue to members, there is, however, controversy whether this protection remains intact when these benefits have accrued to members.