Breakdown in marriage –
splitting of superannuation interest
The Commonwealth’s Family Law Act, 1975, now provides for the division
of superannuation benefits in the same way as other assets in the
event of a breakdown in marriage. In cases where a Member Spouse and
a Non Member Spouse decide to split a superannuation interest, a superannuation
entitlement can be split and shared as set down in one of two options.
The splitting of a Member Spouse’s superannuation interest can
be made by the serving of a “splitting instrument” to the Police Superannuation
Board, in one of two ways:
- by agreement between the parties; or
- by Court Order.
The splitting instrument must specify either a dollar amount (referred
to as the “base amount”) which represents a share of the total value
of the superannuation interest, or a specific percentage of the interest
to be shared with the Non Member Spouse.
To determine the value of a superannuation interest an application
(Form 6) must be lodged with the Police Superannuation Office, requesting
information of the value of the Member Spouse’s superannuation interest
at the date(s) specified in the application. The determination of
the value of the superannuation interest is calculated using the SA
Police Superannuation Scheme valuation factors, as approved by the
Commonwealth, under the Family Law (Superannuation) Regulations
2001.
The Police Superannuation Act 1990 has been amended to complement
the Commonwealth’s Family Law provisions. Upon the receipt of
a splitting instrument a separate interest will be created in the
name of the Non Member Spouse. The treatment of the Non Member Spouse’s
interest will be as follows.
In the splitting of a superannuation interest in the “growth phase”
(i.e. the Member Spouse is a contributing member to the Police Superannuation
Scheme) the Non Member Spouse will receive a lump sum and that
lump sum must be:
a) rolled over to a nominated complying fund of choice; or
b) rolled over to the State Government’s Triple S Scheme as the default
roll over option.
c) payable in cash, if the Commonwealth preservation rules are satisfied
(eg over age 55 and retired from work force).
The lump sum paid on behalf of the Non Member Spouse is subject to:
a) Commonwealth taxation laws relating to untaxed superannuation funds;
and
b) Commonwealth preservation laws, which generally means the lump
sum will not be available to be paid in cash until the Non Member
Spouse is over 55 years of age and retired from the work force.
In the splitting of a superannuation interest in the “payment
phase” (i.e. the Member Spouse has retired and is in receipt of a
pension from the Police Superannuation Scheme) the Non Member
Spouse will have the option to:
a) receive a share of the Member Spouse’s pension entitlement; or
b) commute the entire share of the Member Spouse’s pension into a
lump sum; or
c) convert the share of the Member Spouse’s pension to an “associate
pension” which is a pension payable in the Non Member’s own right.
The Non Member Spouse will be provided with full details of the above
options and will have a period of up to three months to make a decision
as to which option he or she will take.
Glossary of terms
Superannuation Interest: the value of an accrued benefit in the
superannuation scheme.
Growth Phase: period during which the benefit is still accruing and/or
not eligible for payment.
Member spouse: the partner to a legal marriage who is a member of
the relevant superannuation scheme.
Non member spouse: the superannuation member’s spouse who is
not a member of the relevant superannuation scheme.
Member information
For information regarding superannuation, contact the Police Superannuation
Office or refer to the website above. Access to the website is now
available on the SAPOL Intranet under Services, Business Service,
FMSB. Group information sessions can be arranged upon request.
