There are varying approaches on valuing and determining the division of superannuation interests in family law matters. Each case will be approached and determined based on its own specific circumstances.
It is important that you seek advice in relation to valuing either your own or your spouse’s superannuation interest prior to agreeing on a property settlement.
Accumulation funds, also known as industry funds, are the most commonly held superannuation interests. The value of this type of superannuation interest is generally determined by a recent member statement and or a completed superannuation information form.
Self-managed Superfunds are becoming more common, particularly as a way to invest in property. However, unlike other types of superannuation, the diverse nature of the self-managed superfunds and the property that they own, make it impossible to prescribe a standard valuation regime.
Self-managed superfunds are usually valued with the assistance of an expert. If required, property within the self-managed superfund may be valued.
Defined Benefit Funds
To value a defined benefit superannuation fund, you will need to send a Form 6 or a Superannuation Information Request Form to the specific fund. After sending away the relevant form, the particular interest may require a valuation by an Actuary to determine its value for family law purposes. Defined Benefit valuation formulas are usually based on a combination of factors including:
A member’s average salary leading up to retirement of the value of the super at retirement;
The age of a member; and
How long a member has worked for the relevant employer.
How do you split superannuation?
The division of superannuation interests occurs by a superannuation splitting order or agreement that is part of Consent Orders, Court Orders or a Binding Financial Agreement.
Once these Orders are served on the Trustee of the superannuation fund, the Trustee will cause a payment to be made to the non-member spouse from a percentage of the member spouse’s superannuation interest or on a specific fixed base amount.
You will not be able to convert the superannuation to cash. The superannuation the non-member spouse receives is still subject to superannuation laws such as not being able to access the superannuation until retirement or hardship.
If you require some assistance with valuing superannuation interests and what your entitlements might be, generally, please contact our Family Law Team today.