Solidarity welcomes plans to review GEPF’s clean-break principle

27 October 2015

Trade union Solidarity today welcomed the plans of the Government Employees’ Pension Fund (GEPF) to revise its implementation of the “clean-break principle”. This follows after Solidarity launched a huge campaign during the past number of weeks against the fund’s application of this principle.

The “clean-break principle” entails that the pension benefits that a divorced member’s former spouse is entitled to in terms of a divorce settlement is paid out to him or her shortly after the divorce has been finalised. To date, the GEPF considered the portion paid out to the former spouse to be a debt on which the member had to pay compound interest on a monthly basis.

Solidarity warned earlier that this principle had an immense negative effect on the pensions and financial position of members of the fund. Solidarity has already started to finalise court documents to fight this pension issue in the High Court.

In response to Solidarity’s campaign, the fund, through its CEO Mr Abel Sithole, confirmed that the fund would review this system. “The method whereby the number of years of service is adjusted in order to calculate the payment to the former spouse is a better and more equitable practice,” said Solidarity Deputy Secretary Johan Kruger.

Kruger said that Solidarity would also ensure reimbursement for its members that have suffered a loss due to this principle. “Several of our members that have been negatively affected have recently approached for assistance. We shall enter into discussions with the GEPF to demand compensation for persons that have suffered financially due to the interest charged by the fund,” Kruger explained. 

Statement issued by Johan Kruger, Deputy head:  Solidarity, 27 October 2015