Self managed superannuation funds (SMSF), Defined benefit interest rates for 2015/2016

Posted on June 19th, 2015

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by Mark Sullivan

Mark Sullivan is a Director at Mullane & Lindsay in Newcastle and specialises in Family, Relationship and Matrimonial Law

The importance of superannuation as a part of a couples’ wealth and financial resources cannot be understated. Australian’s superannuation assets totalled $2.05 trillion at the end of the March 2015 quarter.

It is possible to split the superannuation entitlements of married, de facto and same sex couples as part of a 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. There are exclusions for de facto and same sex couples resident in Western Australia.

When negotiating property settlements our family lawyers are alert to the fact that not all superannuation funds are the same. The nature, form and characteristics of superannuation funds differ.   Different rules apply to different types of funds, even after a splitting order has been made.  Special rules apply to adjustments made to base amounts that a non member spouse (NMS) might receive in a SMSF or a Defined Benefit Fund as a result of a superannuation split.

When a splitting order is served on the trustee of a SMSF or a Defined Benefit Fund, the trustee holds the base amount for payment to the NMS 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 2015 was recently released and an interest rate of 5.3% per annum will be added to the relevant base amounts in the financial year beginning 1 July 2015.   This is .01% of a reduction on the 2014 FY.

Mark Sullivan is a Director at Mullane & Lindsay, and practises extensively in Family, Relationship and Matrimonial Law. If you require any assistance in this area please contact Mark Sullivan to arrange a consultation or contact our Newcastle office.

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