When couples divide their property after the breakdown of a marriage they have the option of splitting their superannuation in order to reach a fair and equitable agreement about the division of their property. Superannuation splitting does not convert superannuation into a cash asset - it is still subject to superannuation laws and is usually retained as superannuation until retirement ages are reached.

Superannuation can be split either by an order of the Family Court of Western Australia or under a binding financial agreement that deals with a superannuation interest. Before asking the court to make orders or entering into an agreement, parties need to alert the trustee of the superannuation fund of their intention to split the member’s superannuation and send the trustee a copy of the proposed orders or agreement to ensure the wording is correct as per their trustee’s requirements.

When considering any superannuation split, determining the value of the superannuation interest is essential. The approach relied upon to value the interests of a fund will depend on the type of fund. There are two main types of funds: defined benefit and accumulation interest. The valuation of accumulation interest funds is usually relatively uncomplicated. However, the value of a defined benefit interest may need to be calculated by reference to a number of factors, including the member’s salary and years of service.

The Family Law (Superannuation) Regulations 2001 set out the methods and formulas to value certain superannuation interests, the way in which the payment split is to be put into effect and the information that the trustees have to provide.

Superannuation splitting and Self Managed Superannuation Funds

The Family Law (Superannuation) Regulations 2001 set out the methods and formulas to value certain superannuation interests, the way in which the payment split is to be put into effect and the information that the trustees have to provide.