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Fund pays high price for marriage split
Superannuation trustees have been issued with another reminder to communicate clearly with members, with a Superannuation Complaints Tribunal (SCT) determination overturning a trustee’s decision relating to a family law split and ordering substantial restitution.
The SCT determination (D16-17\152) substantially agreed with the complainant’s claim that the trustee had failed to provide a member with “crucial and important information” relating to his family law payment split and that this failure meant he was unable to make a fully informed decision to maximise his superannuation entitlement following his marital split.
“Following review of the relevant disclosure material and fund communication, the tribunal finds that the disclosure by the trustee to the complainant in relation to the family law offset account and the addition of earnings to the family law offset account at the three year average rate was inadequate,” the determination said.
“The tribunal finds that the complainant was not adequately informed in 2012 of the operation of the family law offset account in relation to his defined benefit nor his ability to manage the existence of this debt by requesting to move from the defined benefit division to the accumulation division.”
The SCT determination pointed to the trustee’s lack of disclosure to the complainant regarding the three year average rate in two separate letters, the applicable family law fact sheet and the product disclosure statement at the operative time.
It also noted that it was the complainant who had contacted the fund when he was advised of how the offset operated and who then elected to transfer his defined benefit to the accumulation.
“In considering the financial loss associated with inadequate disclosure regarding the operation of the family law offset account, the tribunal has had regard to the difference (if any) between the amount transferred to the complainant’s accumulation account on 16 February 2015 and the amount that would have been in an accumulation account had he transferred his defined benefit to an accumulation account one month after he was advised by the trustee that the payment split had been effected,” the SCT determination said.
It also noted that the complainant had submitted that his employer would have made contribution of 10 per cent of his superannuation salary under the accumulation division for each relevant financial year from the time of the payment split, and this had not been disputed by the trustee.
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