The Governor-General executed new family law superannuation legislation on 20 February 2025 to, among other things, update the default methods for valuing superannuation for family law purposes.
The changes in the Family Law (Superannuation) Regulations 2025 take effect from 1 April 2025 replacing the regulations originally set up in 2001, which were also due to automatically sunset in the first half of 2025.
Application of the new default methods may produce some unexpected results though, with Super Info’s quick testing of the default valuation outcomes suggesting that the post-March valuation of lifetime inflation indexed (CPI) pensions (including 67% reversionary benefits) will increase by almost 4% for a 65-year-old male while decreasing by over 0.5% for a 65-year-old female when compared to the 2001 methods and factors.
The Attorney-General’s Department said that it would also be remaking the 2003 approval instrument to ensure that the scheme-specific valuation methods and factors for particular lifetime pensions and defined benefit interests continue to operate under the new regulations.
If approved by the Attorney-General, the scheme-specific valuation methods and factors would likely mirror the current methods and factors from 1 April 2025 until the trustees of the defined benefit funds review and seek updates (where appropriate) for the methods and factors applying to their schemes.
Importantly, for many of the defined benefit members in the Australian Defence Force and Commonwealth employment, the Commonwealth Superannuation Corporation (CSC) has hinted that the Australian Government is looking at revising the methods and factors for the military and public sector schemes.
In an email response, the CSC said that no timeframes were available at this stage, but that the current methods and factors would continue to apply from April.
Super Info notes that any changes to the scheme-specific methods for valuing particular superannuation interests will be multifaceted, but they will likely incorporate some adjustments for life expectancy improvements from the late 1990s to now, including the closing of the life expectancy gap between men and women as well as a recent slight downward trend in longevity post pandemic.