While it might be the last thing on your mind, your super is your future financial security and it’s important to consider how it will be treated along with the rest of your assets in the event of a relationship ending. Superannuation is treated as property under the Family Law Act 1975, so like any property it can be divided between partners by agreement or court order, but the rules are slightly different because super is held in a trust.
While there are a number of ways to deal with super, there are specific super splitting laws that can also be used (although these are not available to de facto couples in Western Australia). The exact details of how to split your super can be quite complicated and for that reason it’s important to seek independent legal and financial advice to determine the best course of action. In fact, if you want to rely on a payment/interest splitting agreement, each party must get independent legal advice in order for the agreement to be binding on the super fund trustee.
In the event that your marriage or de facto relationship ends, you have three main options for dealing with your super:
1. Payment/interest split.
This approach splits the superannuation benefit immediately and is the most common way of dealing with superannuation after a relationship ends. If you have retired or met another condition of release that allows you to withdraw your super, it can be done as a payment. If you aren’t yet eligible to withdraw your super, the benefit will be split but remain in the super system. If you’re receiving the benefit, you may become a new member in the existing superannuation fund, or rollover the amount to a separate superannuation fund. The process can be a little more complex where a self-managed superannuation fund is involved.
2. Payment/interest flag.
If you are waiting on a specific event to occur, such as the maturation of an investment or an impending retirement, you can flag the super and determine the exact split when that event happens. Flagging allows you to protect your interest in the super fund while you wait for the future event to occur, as interests subject to a flagging order or agreement cannot be paid out until a flag-lifting agreement is entered into.
3. No split or flag.
Instead of splitting or flagging the super account between partners, another option is to treat super as a financial asset along with all of the other relationship assets. This means that the relationship property is simply divided between the parties, taking into consideration the value of the superannuation benefits, without specifically splitting or flagging the super accounts. This is available to all couples, but is the only legal option if you are dissolving a de facto relationship in WA.
How much does each partner receive?
The rules regarding the exact proportion each former partner receives are quite complex and require consultation with a family lawyer, and often a financial specialist. Before you make any decisions, you will need to collect information about your super funds, which you can do by contacting the trustee of the super fund.
If you and your former partner can reach an amicable decision you can submit a formal written agreement or apply to the court for a Consent Order. If you are unable to come to an agreement, you will need to seek a court order to split the superannuation. In any case you will need to inform the super trustee so they can take the appropriate steps.
The following table contains details of the superannuation funds rated by Canstar based on someone aged 40-49. This table has been sorted by one-year performance (highest to lowest).
Please note that the performance information shown in the table is for the investment option used by Canstar in rating of the superannuation product.
To view the past performance of all super funds, rated by Canstar, use our comparison tool: