Question posted in the Divorce Law category relating to Western Cape
I am married ANC with accrual, getting divorced. My question is about the accrual calculation
Custom and practice for the accrual is to take commencement values adjusted by inflation and subtract this value from current value.
In my case my main asset is my provident fund and I have documented actual returns by each year of marriage. So if it commenced with R100 in 2004 that value using CPI is now R200. However the actual value of the R100 is far more than inflation eg R300, as the provident fund ACTUAL returns were in the order of 14% vs around 65 for CPI on an annual basis.
Lets say the fund is now worth R1000
Do I have a case to argue that in my example the accrual is NOT R1000-R100=R900 by ACTUALLY R1000-300=R700
This makes a significant difference to what i have to split
Sorry should read 6% for CPI
Message from the Customer
Do I have a case to argue that in my example the accrual is NOT R1000-R200=R800 by ACTUALLY R1000-300=R700
Message from the Attorney
Hi there and thank you for your question,
Unfortunately no, there is not.
If the provident fund grew by 14% instead of a lesser rate then that is your partner's good luck because it has increased your accrual.
Remember, that by taking the commencement value and adjusting it for CPI all you're really doing is attempting to bring the provident fund's commencement value in line with current market conditions.
The "growth" that the provident fund achieves is what you're looking to calculate - and if the provident fund has grown by 14% then it is good luck for the other person.
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
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Message from the Customer
Many thanks. I am not sure you have answered my question in entirety.
Over 12 years the fund grew over 400% actually. The CPI equivalent growth was 100%.
So whilst the currrent value has quadrupled, this also applies to my commencement value. So my argument for the accrual to be split is: accrual =
(Current fund value)-(commencement value x growth%) instead of
(Current value)-(commencement value x CPI%)
I realise the act refers to CPI adjustments of commencement value , however in this case I have the actual fund returns per year and am able to demonstrate that the commencement value is actually a far bigger % of the current value than a calculated CPI increase
Message from the Attorney
Hi there,
No, you can't calculate it like that.
You must base your calculations on the actual commencement value of the policy, and you must then adjust it to take into account inflation. i.e. CPI.
Accrual = (Current value) - (commencement value x CPI%)
I hear what you're saying, but you won't be able to do that.