Key Definitions
What is a superannuation agreement?
What is a court order?
What is a decree absolute?
What is a separation declaration?
Information requests
What are information requests?
Who can apply for information?
How requests for information about a member’s superannuation interest may be made?
How soon will the applicant receive a reply to a request for information?
Confidentiality requirements of Member’s information
What kind of fees would the trustee charge for this information?
Steps for application – an overview
Splitting a Superannuation Interest
Introduction
What types of superannuation interests can be split?
What superannuation interests cannot be split?
How does a split come about?
What are the steps involved in splitting an accumulation or allocated pension interest?
How will a superannuation interest be split?
Is there a charge for splitting a superannuation interest?
Flagging a superannuation interest
What does flagging mean?
Why put on a flag?
How is a flag removed?
Are there any superannuation interests that cannot be flagged?
What are the steps involved in flagging a superannuation interest?
Is there a charge for flagging a superannuation interest?
How to contact ING
Where should all requests be sent?
Other useful family law and superannuation links
ING and ANZ Superannuation Trustee and Funds
Introduction
From 28 December 2002, amendments made to the Family Law Act 1975, the Superannuation Industry (Supervision) Regulations 1994 and other relevant legislation have provided divorcing or separating couples with a better way to directly split superannuation interests.
All references to ING are to ING Australia Limited ("ING") (ABN 60 000 000 779). The trustee is ING Custodians Pty Limited ("ING Custodians") ABN 12 008 508 496: AFSL 238346; RSE L0000673. ING Custodians is a subsidiary of ING. The trustee is the issuer of the superannuation products.
Superannuation assets will form part of marital property which may be split between a member and the member’s spouse as part of a family law property settlement.
Is it compulsory?
It is important to note that although the legislation allows a superannuation interest to be split, it is not mandatory and that there are other options available for divorcing couples to consider when determining how to allocate marital assets upon property settlement when divorcing or permanently separating.
To whom do the new laws apply?
The changes will apply to divorce property settlement proceedings that had not commenced or had not been finalised before 28 December 2002.
Parties who have already had their property settlement finalised, either by agreement or court order, prior to 28 December 2002 are not able to take advantage of the new laws.
Please seek further information from your solicitor in relation to this issue.
NB. The new laws do not extend to de facto relationships or same sex life partnerships.
What types of superannuation funds do the new laws cover?
The new superannuation laws apply to all eligible superannuation funds, including:
- Regulated superannuation funds;
- Retirement savings accounts; and
- Approved deposit funds.
This means that if a member or their spouse has superannuation interests in any of the above types of superannuation funds, then the superannuation interest may be subject to the new superannuation splitting laws. There may be some products that may not be subject to the superannuation splitting laws. Please check with your financial adviser.
A listing of ING superannuation funds can be found at the end of this document.
Key Definitions
What is a superannuation agreement?
A superannuation agreement forms part of the financial agreement. You should contact a solicitor if you wish to arrange for a financial agreement to be prepared.
What is a court order?
A court order is a document issued by the Family Court. The court order will specify the arrangements for property settlement as determined by the court. For more information, please see the Family Court website (refer to the links at the end of this document).
What is a decree absolute?
A decree absolute is the final document issued by the Family Court stating that a marriage is legally dissolved.
What is a separation declaration?
A separation declaration can be used instead of providing a decree absolute, ie where the decree absolute has not yet been received. The separation declaration must have the following:
- It must be signed and dated by at least one of the spouses;
- The date of the latest signature must be no more than 28 days prior to the date of serving on the trustee of the superannuation fund;
- Depending on the total withdrawal value of the superannuation interest at the time of the declaration:
Information requests
What are information requests?
The new laws provide a way for eligible persons to apply for information about superannuation interests from the trustees of eligible superannuation funds. The information requested would be for the purpose of establishing the value of a member’s superannuation interest. The couple would then be able to enter an agreement or apply for a court order relating to the division of that superannuation interest.
Who can apply for information?
An ‘eligible person’ may submit a request for information about a member’s superannuation interests to the trustee of the member’s superannuation fund. An eligible person is:
- A member; or
- The spouse of a member; or
- A person who intends to enter into a superannuation agreement with the member (eg. a pre-nuptial agreement, which is an agreement about distribution of a couples’ assets upon divorce which they enter into prior to marriage).
There are significant penalties for providing misleading or false information in an application for information.
How requests for information about a member’s superannuation interest may be made?
To request information about a member’s superannuation interest, the eligible person must provide the following:
- A covering letter to the application; and
- A fully completed Declaration Form which is in the prescribed format; or
- The fully completed documents as per the Family Court website.
We have included an example of how you would fill out the Declaration Form (Sample Declaration Form).
The information content of the Declaration Form is prescribed by law and all information requested should be supplied, otherwise the application will be rejected.
ING will only send out the information for superannuation interests specified in the request. Information provided will be limited to the prescribed information. All other information is subject to Privacy law requirements and will not be released without the member’s consent.
An application must meet the following requirements:
- Be accompanied by a declaration in the prescribed form (see above)
- The declaration which accompanies the application must include:
- The applicant’s name, address and date of birth;
- The name of the superannuation fund to which the application relates;
- The name and date of birth of the member.
- Must specify whether the applicant is one of the following persons:
- The member; or
- The spouse of the member; or
- A person who intends to enter into a superannuation agreement under the relevant part of the Family Law Act 1975 with the member
- Must include a statement that the information is required either:
- To assist the applicant to properly negotiate a superannuation agreement or
- To assist the applicant in connection with the relevant part of the Family Law Act 1975.
If any of the information specified above is not provided, the application may need to be re-submitted, addressing the above requirements.
How soon will the applicant receive a reply to a request for information?
By law, the Trustee must respond to the person requesting the information within "a reasonable time" after the request has been received by the Trustee. We are currently responding to requests for information within 14 days of receipt of the request at ING’s principal place of business.
Confidentiality requirements of Member’s information
There are legal requirements that specify that the Trustee must not:
- Inform the member that an application for information has been received; or
- Provide the non-member spouse with any address of the member.
What kind of fees would the trustee charge for this information?
ING does not currently charge fees for any requests for information. The Trustee reserves the right to impose Family Law fees in the future for some costs incurred in attending to certain enquiries and administration work in relation to family law matters and superannuation matters.
Steps for application – an overview
- Eligible parties (see above under “Who can apply for information?") may request information about a member’s superannuation interest. The request must be in the form of a covering letter and a prescribed declaration (see above).
- ING will provide information to an eligible request which is in the required form. This information will enable the eligible inquirer to ascertain the value of the member’s superannuation benefit.
- The parties may make an agreement or go to court regarding how the superannuation should be divided, ie split, flagged or paid out (if applicable).
- The Court Order or agreement will be received by ING, resulting in a split or flag being imposed on the member’s benefit.
- ING notifies both parties as to the date on which the court order or agreement was implemented.
- ING complies with the court order or agreement.
Splitting a superannuation interest
Introduction
Divorcing or separating couples may split superannuation benefits either by a superannuation agreement or by a court order.
What types of superannuation interests can be split?
Subject to the exclusions listed below, all types of superannuation interests can be split. This applies to interests in the accumulation phase (ie accumulation and defined benefit interests) as well as those in the payment phase (ie pensions).
What superannuation interests cannot be split?
The following superannuation interests cannot be split:
- Any superannuation interest with a withdrawal value of less than $5,000;
- Payments made on grounds of financial hardship
- Certain disability payments; and
- Certain child beneficiary payments.
How does a split come about?
A member’s superannuation interest can be split via a superannuation agreement or a court order. A superannuation agreement or court order will provide instructions to the trustee of the superannuation fund as to how a superannuation interest is to be split, ie a percentage amount, base amount or the method of calculation of the base amount.
What are the steps involved in splitting an accumulation or allocated pension interest?
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Via a superannuation agreement |
Via a court order |
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How will a superannuation interest be split?
The usual method of splitting is to create a new superannuation interest for the non-member spouse. This may be done by allowing the non-member spouse to open a new member account in their name in the relevant ING/ANZ superannuation fund. The balance of the new account will initially comprise those benefits resulting from the split from the member’s interest.
The amount that is transferred to the non-member spouse will be:
- For accumulation and allocated pension interests: the splittable amount of the account balance to be split in favour of the non-member spouse at the relevant date.
- For defined benefit interests: an amount which is calculated according to a Government prescribed mathematical formula.
Is there a charge for splitting a superannuation interest?
The Trustee may charge a fee for splitting a superannuation interest. ING does not currently charge a fee for processing of splitting requests. The Trustee reserves the right to impose Family Law fees in the future for some costs incurred in attending to certain enquiries and administration work in relation to family law matters and superannuation matters.
Flagging a superannuation interest
What does flagging mean?
Flagging superannuation interests results in the member’s account being "frozen" so that no benefit can be paid out until that flag is lifted. This means that the superannuation interest cannot be cashed, transferred or rolled out of the fund.
Why put on a flag?
A “flag” may be an alternative option to splitting a superannuation benefit when the member is nearing a condition of release, eg. retirement. A flag generally prevents payment of benefits until agreement to split the interest or other action is agreed by the parties or by court order.
Flags may also be suitable where an accurate value of a member’s benefit cannot be determined at the time of the property settlement; eg some defined benefit interests.
How is a flag removed?
A flag may be lifted via a superannuation agreement or a court order. The superannuation agreement or court order may also specify that a split is to take place. It will then have the same characteristics as a splitting agreement or court order. Refer to “Splitting a superannuation interest” above for further details.
Are there any superannuation interests that cannot be flagged?
Yes. The following superannuation interests cannot be flagged, or are exempt from the flagging rules:
- Interests that are in the form of a pension;
- Benefit payments that have been requested, but have not yet been processed prior to the effective date of the flag;
- Payments made on grounds of severe financial hardship, compassionate grounds;
- Certain temporary incapacity payments; and
- Certain child beneficiary payments.
What are the steps involved in flagging a superannuation interest?
1. A copy of the agreement or court order is issued to the trustee of the relevant superannuation fund, along with the following documentation:
- For a superannuation agreement flag – a statement from each spouse’s solicitor stating that independent legal advice has been provided (and signed by the solicitor); plus
- Decree absolute; or
- A separation declaration.
2. The Trustee will flag the superannuation interest and will notify both parties that the flag has been actioned.
Is there a charge for flagging a superannuation interest?
The Trustee may charge a fee for flagging a superannuation interest. ING does not currently charge a fee for processing of flagging requests but reserves the right to do so in the future.
How to contact ING
Where should all requests be sent?
Completed applications for information, splitting or flagging agreements or court orders, should be sent to ING’s registered office and principal place of business, which is:
The Family Law Unit
ING Australia Limited
GPO Box 3398
SYDNEY NSW 2001
AUSTRALIA
Telephone: 133 665
Fax: (02) 9234 7827
Other useful family law and superannuation links
The Family Court of Australia: http://www.familycourt.gov.au/
Family Relationship Advice Line: 1800 050 321
Attorney General’s Department: http://www.law.gov.au/
The Australian Taxation Office: http://www.ato.gov.au/
ING and ANZ Superannuation Trustee and Funds
Please check with your financial adviser regarding products not listed here.
Current as at December 2007
