It is possible to split the superannuation entitlements of married and de facto couples as part of their property settlement adjustment. Such splits need to be the subject of a Court order or a Superannuation Agreement entered into strictly in accordance with the Family Law Act.
Different rules apply to different types of funds, as the nature, form and characteristics of funds differ. When there is an order for a base amount to be split from spouse A’s superannuation entitlements in favour of spouse B, the treatment of adjustments made in favour of spouse B is different if spouse A’s superannuation entitlements have been in a SMSF or a Defined Benefit Fund.
When the splitting order is served on the trustee of the SMSF or Defined Benefit Fund, the trustee will generally hold the adjusted base amount for payment to spouse B until the member satisfies a condition of release. In the interim the trustee must add interest to the base amount pending payment in accordance with determinations of the Government Actuary. The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2021 was recently released and an interest rate of 5.7% per annum will now be added to the relevant base amounts in the financial year beginning 1 July 2021.
