What is Superannuation?

Superannuation is essentially a portion of your salary that is set aside each time and given to you when you retire. This is done so that when you retire, you have a source of money that you can rely on as you are no longer a member of the workforce.

Your employer provides an agreed upon amount of your salary to a Superfund of your choice who will in turn, invest the money and provide it to you upon retirement. It is important to note that you cannot access your superannuation until you retire.

How Does Superannuation relate to my Family Law Proceedings?

In property proceedings the superannuation of both you and your ex-partner are generally considered part of the property pool.

Part VIIIB of the Family Law Act empowers the Court to make a splitting order requiring payments under a superannuation policy to be allocated between the member of the Superannuation fund and the nonmember spouse. Further, as per section 90XS of the Family Law Act, Property orders made by the court may include the superannuation interests of parties.

What types of Superannuation are there?

Broadly Speaking there are two major types of superannuation funds, accumulation funds and defined benefit funds.

Accumulation Funds – An accumulation fund is the most common type of superannuation fund. An accumulation fund works by you gradually adding money to the fund overtime.

Defined Benefit Funds – defined benefit fund, differs in that your retirement benefit is determined by a formula instead of being based on investment return.

Although at face value an accumulation fund and a defined benefit fund may appear to have the same value (say for example: $1,000,000), because of how they vary the way their value is realised differs considerably.

An accumulation fund on the one hand on some level is at the mercy of market forces (due to the funds being invested), however can be received, if the member so wishes, as a lump sum.  The defined benefit fund on the other hand may not be subject to market forces. But the member can only be paid a non-commutable indexed pension, no lump sum.

As such, these differences are taken into account when the Court is considering a property pool that contains Superannuation to ensure a just and equitable property split.

You should always get advice from the best family lawyers in Sydney. Barker Evans provides expert family law advice, and we are located in the heart of Sydney CBD. We have considerable experience with guiding our clients through complex property matters concerning their superannuation.

If you want advice from an expert family lawyer, please do not hesitate to contact Barker Evans us on (02) 8379 1892 or info@barkerevans.com.au.