media release
23 February 2022
HESTA urges super funds to adopt new super splitting procedures following successful pilot
HESTA is urging super funds to adopt a new universal, streamlined process to make the splitting of superannuation assets easier, faster and fairer following the results of a successful pilot program.
HESTA is the first Australian super fund to adopt the Simpler Super Splitting initiative, which uses a simple, plain language form for court orders that can be used across the super and legal sectors and by the courts.
Together with Women’s Legal Service Victoria (WLSV), super fund administrator Link Group and Australian Family Lawyers, HESTA recently trialled the court-endorsed orders and simplified process in a live super splitting case involving two HESTA members, which achieved significant reductions in time delays and legal costs.
Evaluation of the pilot revealed the time to process a super split, which has previously been lengthy, reduced significantly, with time for super trustees to approve draft orders also significantly reduced.
HESTA CEO Debby Blakey said a streamlined industry process for splitting super assets would remove complexity and speed up processing times, reducing stress for super fund members at a difficult time in their lives.
“This universal, simplified process will go a long way towards ensuring equity in super outcomes when relationships end, but we need more super funds to come on board,” Ms Blakey said.
“Dividing super assets to date has been an unnecessarily long and complex process, often requiring expensive legal advice that can unfortunately result in many women, especially those from low-income households or who are experiencing disadvantage, walking away from their fair share of super assets”.
“Given super is often the largest or only asset in the relationship for low-income families, it means many women are potentially losing their only income in retirement beyond the Age Pension”, Ms Blakey said.
The process for splitting super assets differs from fund to fund. Complexity around obtaining and completing the super splitting orders makes the forms difficult to complete without legal assistance.
Simpler Super Splitting is a joint initiative involving HESTA, WLSV, not-for-profit super fund peak body Australian Institute of Superannuation Trustees (AIST), Women in Super, Link Group, other super fund leaders and representatives from the Federal Circuit Court, government and regulators, with pro bono legal support from Australian Family Lawyers and Mills Oakley Lawyers. Work is already underway to roll the new process out nationally to other super funds.
WLSV CEO Serina McDuff said it was great to see a key reform recommended by WLSV in its landmark Small Claims Large Battles report starting to be implemented by the super industry.
“We identified through our report that women missing out on their share of superannuation after separation was contributing to poor economic outcomes, including long-term poverty and homelessness”.
“With women aged over 55 the fastest-growing group of homeless people in Australia, we prioritised creating change in this area so we could positively impact women’s economic futures”, Ms McDuff said.
The report found superannuation was the only significant asset for 21% of women represented by WLSV in the research project, and in 39% of all small claims cases, there was a split of super assets.
AIST CEO Eva Scheerlinck said: ”Simplifying the process of splitting superannuation through family law settlements will benefit all parties by making the process far more efficient, fair and cost-effective. A number of AIST members are in the process of adopting the new templates and we encourage all funds to do so.”
The push for improvements to the splitting of super in family law settlements culminated last year in legislation to improve the visibility of super assets. From 1 April 2022, parties to family law proceedings can apply to the courts for information from the Australian Taxation Office about their former partner’s super. This single information source on where super assets are held will help make the new super splitting forms easier to complete.
Ends.
About HESTA
HESTA is the largest superannuation fund dedicated to Australia’s health and community services sector. More than half of those working in the sector nationally invest their retirement savings with HESTA. An industry fund that’s run only to benefit members, HESTA now has more than 900,000 members (over 80% are women) and manages over $68 billion in assets invested around the world.
HESTA is committed to creating a real difference to the financial future of every member. As a responsible steward of their members’ retirement savings, HESTA focuses on achieving strong, sustainable, long-term returns while making a positive difference to the world members will retire into. HESTA is the acronym for Health Employees Superannuation Trust Australia and should appear in capitals.
About Women’s Legal Service Victoria
Women’s Legal Service Victoria is a not-for-profit organisation which helps women address the specialist legal issues which arise from family violence and relationship breakdown. Our unique cross-jurisdictional approach – assisting women across family violence law, family law and child protection law – gives our clients the best chance of addressing their most pressing legal matters. Meanwhile, our social workers and financial counsellors help clients address the non-legal issues which can arise in a violent relationship, such as debt, homelessness and poor mental health.
As part of our vision to help build a gender equitable country, we also advocate for laws and policies that respect and promote the rights of women and train other professionals to identify and respond appropriately to women’s legal needs.
About Australian Institute of Superannuation Trustees
AIST is a not-for-profit membership organisation representing the interests of Australia’s $1.6 trillion profit-to-member superannuation industry. Our members and subscribers are the trustee directors, employees and associates of industry, corporate and government superannuation funds.
We advocate for financial wellbeing in retirement for all Australians, regardless of their gender, culture, education or socio-economic background. Through leadership and excellence, we support profit-to-member funds to achieve member-first outcomes and fairness across the retirement system.