Family Law - Military Superannuation & Benefits Scheme
- Arnold Shields
- Nov 12, 2009
- 2 min read
Updated: Jun 23
The Military Superannuation and Benefits Scheme (MSBS) replaced the Defence Force Retirement and Death Benefits Scheme (DFRDB) and was established under the Military Superannuation and Benefits Act 1991 (MSB Act).
It provides retirement benefits to ADF members who joined on or after 1 October 1991 and closed to new members from 1 July 2016.
Types of Retirement Benefits
The MSBS pays out in two distinct components:
Member Benefit: This is made up of member contributions, plus accumulated interest.
Employer Benefit: Calculated as a function of final salary and years of service. This is paid as a lump sum, but at least 50% must be converted into a lifetime pension.
Family Law and Valuation of MSBS
Under the Family Law Act, superannuation is considered property and can be split between separating parties. However, the MSBS differs from typical industry or retail superannuation funds in a few key ways.
Alternate Methods of Valuation
In May 2004, alternate valuation methods were approved for use with MSBS benefits. Importantly:
The trustees do not provide a fund valuation directly.
It is up to the parties (or their legal representatives) to obtain a valuation based on the family law information provided by the trustee.
To assist with this, a Form 6 Application can be submitted. This form is available on the MSBS website and costs $150 per calculation date requested.
What the Website Offers
The ComSuper website (now administered by CSC – Commonwealth Superannuation Corporation) provides a wealth of information, including:
Family Law fact sheets
Sample superannuation splitting orders
Information request forms
Step-by-step guidance on super splitting under family law
Transfer of Non-Member Entitlements
Once a superannuation interest is split under a court order, the non-member spouse receives an associate interest in the scheme.
However, unlike many other super funds, the MSBS does not permit the transfer of this associate interest to another fund until a condition of release (such as reaching retirement age) is met.
Key Takeaways
MSBS is a defined benefit fund with complex rules.
At least half of the employer benefit must be taken as a pension.
You must apply and pay for a valuation under family law – the trustee will not supply it.
The associate member’s portion cannot be rolled over to another fund until a condition of release is met.
If you're dealing with the MSBS in a family law matter, it's essential to engage experienced professionals who understand the nuances of defined benefit schemes and military pensions.
Need a valuation of MSBS for family law purposes?
Contact the team at Dolman Bateman for expert advice and valuation services tailored to military superannuation matters.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
