The NSW State Superannuation Scheme has now amended their Regulations to allow for the splitting of superannuation interests in Family Law. Up until this point, the trustees were effectively flagging the growth phase interests, awaiting the amenedments to the acts to allow for either splitting and the transfer of the non-member spouse’s interest to another fund.
In payment phase splits (ie. pension had commenced), the trustees were spilitting the payment of the pension rather than the pension itself. The trustees can no transfer the non-member spouse benefit to another fund.
One of the problems that have been arising with the new system, is that non-member spouses receive their interest as a lump sum, whilst the member will only continue to receive a pension. This causes two areas of disagreement and confusion:
One, as the interest is split as a lump sum, the non-members lump sum will be greater than the members lump sum assuming a 50/50 split.
Two, the member’s family law value represents the present value of an income stream and if over age 60, will never have access to the capital amount represented by the Family Law value.