When producing a report on the present value of superannuation entitlements for family law purposes, the ideal situation is to have the administrator provide the member data at the requested calculation date. The information lines up with the prescribed formulae – especially if the fund has special methods and factors approved. The only item that may be missing is the date of birth as it’s on the “Superannuation Information Application” and we don’t normally get a copy of this paperwork. Where a consent agreement is not likely, then this approach is the logical and sensible path from outset.
However, because information can be expensive and time delaying to obtain, we occasionally get asked if we can work from a member statement. For some funds it is possible to deduct the necessary information – but it is not ideal.
Far more common is a request to calculate what accrued during the relationship updated to a current date. In other words, there are no further contributions or additions to the accrued benefit multiple after the end of the relationship, but it is adjusted to present dollars. I suspect that in many cases a rough proportional adjustment is made. This certainly is not likely to be very accurate with Superannuation Guarantee accumulation benefits – but more likely to be appropriate on many defined benefits. We can produce better estimates than that, depending on what data is available for the calculations. Sometimes the accrual to be excluded is both before and after the period of the relationship.
Where the superannuation fund has provided information at the dates of interest, then we can calculate the values of the entitlements accurately at those dates. To update this information to a current action date is usually on the “base rate” adjustments. These “interest rates” are published each year by the Commonwealth Government Actuary. They are used where a family law debt is recorded for later payment e.g. retirement. I like this approach because it exactly replicates what would have occurred if a base amount settlement had been effected at separation.
An alternative to this is to work from a current member statement or super information form and split the accrued multiple into the periods of interest. This approach picks up the post separation salary history – something that ideally should not be a factor.
NetActuary doesn’t adjust its $385 inclusive fee for this extra calculation – or multiple calculations – in a family law matter, nor do we charge extra for split invoices. This has become a major service area for NetActuary. Give us a call on 03 6223 2320 if we can assist.
The NetActuary Team