EXPLANATORY STATEMENT
FAMILY LAW (SUPERANNUATION) (PROVISION OF INFORMATION – MILITARY SUPERANNUATION AND BENEFITS SCHEME) AMENDMENT DETERMINATION 2005 (No.1)
ISSUED BY THE AUTHORITY OF THE ATTORNEY-GENERAL
In this instrument the Attorney-General provides, by written determination under subregulation 64(7B) of the Family Law Regulations (Superannuation) 2001 (the Principal Regulations), for the matters about which the trustee of the Military Superannuation and Benefits Scheme (the Scheme) is required to provide information, under the family law and superannuation reforms permitting superannuation to be split on marriage breakdown, in respect of interests in the Scheme that are in the payment phase for which alternative valuation methods have been approved.
When alternative valuation methods were initially approved in relation to interests in the Schemes in 2004, there was no power under the Principal Regulations to make a determination about information requirements under the reforms in respect of a superannuation interest that is in the payment phase.
Subregulation 64(7B), providing for a power to make a determination in respect of such an interest that is paying benefits as a lifetime pension, was inserted in the Principal Regulations by the Family Law (Superannuation) Amendment Regulations 2004 (No.1) in September 2004.
The information provided under the reforms by the trustee of the Scheme to spouses will enable them to value superannuation interests in the Schemes that are in the payment phase and paying lifetime pensions in accordance with the alternative valuation methods.
In the instrument, the Attorney-General also provides that the trustee of the Scheme is not required to provide information relevant to valuing a superannuation interest in the Scheme in accordance with the default method under the reforms which the alternative valuation methods replace.
Finally, the Attorney-General in the instrument also makes adjustments to the matters on which the trustee of the Scheme is not required to provide information in respect of an interest within a category of interests for which he approved an alternative valuation method in 2004. The adjustments are consequential on the inclusion by the Family Law (Superannuation) Amendment Regulations 2004 (No.1) in the Principal Regulations of default methods for valuing a defined benefit superannuation interest held by a party to a marriage as a result of employment in which the party is, at the time of valuation, no longer engaged.
The instrument incorporates by reference the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003, the instrument containing the alternative valuation methods approved under the Principal Regulations for the purpose of the family law and superannuation reforms, which can be viewed at the following website:
http://www.comlaw.gov.au/ComLaw/Legislation/LegislativeInstrumentCompilation1.nsf/current/bytitle/0C1BC81DBE638317CA256FAB000F0455?OpenDocument&mostrecent=1
A copy of the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2003 may be purchased from CanPrint Information Services, PO Box 7456, Canberra MC ACT 2610 (telephone: 1300 656 863).
Consultation on the content of the instrument was undertaken under section 17 of the Legislative Instruments Act 2003 with the Commonwealth Superannuation Administration (ComSuper) by way of exchange of correspondence and discussions.
Overview
The Family Law (Superannuation) (Provision of Information – Military Superannuation and Benefits Scheme) Amendment Determination 2005 (No.1), issued by the Attorney-General under the authority of the Legislative Instruments Act 2003, was enacted to address the problem of providing specific information about the Military Superannuation and Benefits Scheme to spouses in the context of family law and superannuation reforms that permit the splitting of superannuation on marriage breakdown. This determination was necessitated by the lack of regulatory power to specify information requirements for superannuation interests in the payment phase when the alternative valuation methods were first approved in 2004. The policy objective of this determination is to enable spouses to accurately value superannuation interests in the Scheme that are in the payment phase and paying lifetime pensions, in accordance with the approved alternative valuation methods. The determination also clarifies that the trustee of the Scheme is not required to provide information relevant to valuing superannuation interests according to the default method, which the alternative methods replace, and makes consequential adjustments to the matters on which the trustee is not required to provide information.
Scope and Application
The Family Law (Superannuation) (Provision of Information – Military Superannuation and Benefits Scheme) Amendment Determination 2005 (No. 1) applies to the Military Superannuation and Benefits Scheme, specifically to trustees who must provide information on interests in the Scheme that are in the payment phase and for which alternative valuation methods have been approved. This determination is a response to the family law and superannuation reforms which allow for the splitting of superannuation on marriage breakdown, and it enables spouses to accurately value these superannuation interests in accordance with the approved alternative valuation methods. The instrument does not require the trustee to provide information for valuing superannuation interests according to the default method, which the alternative valuation methods replace, and it adjusts certain matters related to the valuation of defined benefit superannuation interests held by parties to a marriage as a result of employment they are no longer engaged in. This legislation operates within the Commonwealth jurisdiction and its reach is not limited to specific persons or entities but is relevant to those involved in the Military Superannuation and Benefits Scheme. The determination is made under subregulation 64(7B) of the Family Law Regulations (Superannuation) 2001, and any further extensions or restrictions of its application would be through subordinate instruments.
Key Provisions
The Family Law (Superannuation) (Provision of Information – Military Superannuation and Benefits Scheme) Amendment Determination 2005 (No.1) (the Determination) primarily amends the Family Law Regulations (Superannuation) 2001 (the Principal Regulations) to specify the information the trustee of the Military Superannuation and Benefits Scheme (the Scheme) must provide about superannuation interests in the Scheme that are in the payment phase. This is achieved under subregulation 64(7B) as introduced by the Family Law (Superannuation) Amendment Regulations 2004 (No.1). The Determination ensures that spouses can value these interests in line with approved alternative valuation methods. Additionally, it clarifies that the trustee is not required to provide information relevant to valuing these interests using the default method, which was superseded by the alternative methods.
The Determination imposes specific obligations on the trustee of the Scheme. They must provide information to spouses about superannuation interests in the Scheme that are in the payment phase and paying lifetime pensions, ensuring these interests are valued according to approved alternative valuation methods. Furthermore, the trustee is exempt from providing information for valuing these interests using the default method. These obligations are designed to facilitate the accurate valuation of superannuation interests under the family law and superannuation reforms.
Failure to comply with the obligations set out in the Determination could result in legal consequences. Although the Determination itself does not explicitly state penalties for non-compliance, breaches of regulations under the Principal Regulations could lead to civil or criminal penalties. The severity of these penalties would depend on the specific breach and the relevant legislation governing the Principal Regulations. The exact nature and extent of penalties are typically outlined in the primary legislation or other related regulations.