The Family Law Superannuation Information Form, can be difficult to understand.
This is the first is a series of articles in which we examine common defined benefit superannuation schemes and the Family Law provisions in respect of the valuation and splitting of members interests.
Background to Commonwealth Superannuation Scheme
The Commonwealth Superannuation Scheme (CSS) was set up in 1976 exclusively for employees of the Australian Public Service and participating agencies. The CSS was closed to new members in 1990.
Retirement Benefits
It is a multiple benefit superannuation scheme with benefits generally being made up of the following parts:
- a member component-the members contributions plus accumulated interest; and
- an employer component-which includes two separate parts.
In most cases the first part of the employer component is paid as an indexed pension. The defined benefit is a function of final salary, length of contributory membership, prospective (i.e. potential) membership and age at exit. For the majority of members this is the main benefit available from the CSS.
The second part of the employer component is the superannuation productivity benefit (known as the productivity component), which includes employer contributions and accumulated interest.
In most instances, the member and productivity components can be taken as additional non-indexed pension rather than as a lump sum.
Alternate Methods of Valuation
In May 2004, the alternate methods of valuation were approved for the Scheme. The trustees however do not provide a valuation of the fund. It is therefore necessary to obtain a valuation of the fund based on the family law information provided by the trustee.
The Form 6 application is available on the website and they charge $150 for each calculation date requested.
The website provides a great deal of information of Family Law including applications for information, fact sheets and sample orders.
Where can the non-member funds be transferred.
The non-members interest cannot be transferred to another fund. The interest is classed as an associate interest with Commonwealth Superannuation Scheme until a condition of release for the associate member is satisfied.
Relevant Legislation and Information
Website: www.comsuper.gov.au
Information Guide: www.css.gov.au/documents/publications/cfambook.pdf
Instrument: Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003 Volume 1