Most Australians now hold superannuation in an accumulation account: contributions go in, investment returns are credited, fees and tax come out, and the balance is the balance. A defined benefit interest works differently. The benefit is defined by a formula in the scheme rules — typically involving salary, years of service and a multiple — rather than by an account balance. Older public sector and corporate schemes are the usual examples, and many are closed to new members but still hold long-serving members.
That difference has real consequences in a family law property settlement. This guide explains how defined benefit interests are valued, where the scheme-specific rules come from, and what tends to go wrong. It builds on our general guide to superannuation in property settlements.
Accumulation compared with defined benefit
| Feature | Accumulation interest | Defined benefit interest |
|---|---|---|
| What determines the benefit | Contributions plus net investment returns | A formula in the scheme rules (salary, service, multiple) |
| How value is determined for family law | Broadly the amount standing to the member’s credit — regulations 53 and 54 | Formula-based method with prescribed valuation factors — regulation 52 and Schedule 3 |
| Scheme-specific methods | Rarely relevant | Often decisive — approved methods and factors under regulations 62 and 70 |
| Expert evidence | Usually unnecessary | Frequently appropriate, especially for pensions in payment |
| Implementation | Generally a rollover for the non-member spouse | Depends on scheme rules; may create a separate entitlement rather than a transfer |
What counts as a defined benefit interest
“Defined benefit interest” is a defined term — regulation 6 of the Family Law (Superannuation) Regulations 2025 (Cth). Whether an interest is in the growth phase or the payment phase is also defined — regulations 7 to 9 — and it changes which valuation rules apply. Some interests are hybrids: the Regulations contain specific rules where the benefit is the greater, or the lesser, of a defined benefit amount and an accumulation amount, and where the interest consists of several components — regulations 56 to 59.
Valuation: interests in the growth phase
For most defined benefit interests in the growth phase, gross value is determined under regulation 52, which applies the method in Schedule 3 of the Regulations. Schedule 3 is organised by the circumstances of the member and the shape of the benefit:
- Part 2 — interest relating to current employment where the benefit is payable only as a lump sum, with prescribed lump sum valuation factors;
- Parts 3 and 4 — interest relating to current employment where the benefit is payable only as a pension, with different factor tables according to the guarantee period (none, five years or ten years) and the indexation basis (not indexed, CPI, CPI with a 5% cap, CPI plus 1%, 3%, 4%, 5% or wage indexed), and separate methods where the member is over 65;
- Part 5 — interest relating to current employment where the benefit is payable as a combination of lump sum and pension, including where the scheme restricts commutation or conversion, and the conversion of the accrued benefit multiple;
- Parts 6 to 8 — interests relating to former employment, with discount valuation factors for deferred benefits.
The accrued benefit multiple supplied by the trustee is a key input, and the Regulations define it for information-disclosure purposes in regulation 117. Two things follow in practice. First, the trustee’s information response should be obtained and read carefully — not summarised from memory. Second, an apparently minor difference in indexation basis or guarantee period changes which factor table applies, and therefore changes the value.
Where the whole interest is partially vested, a separate method applies — regulation 55 and Schedule 4, which reduce value by reference to vesting factors. Innovative superannuation interests and percentage-only interests are dealt with separately again — regulations 60 and 61.
Valuation: pensions already in payment
If the interest is in the payment phase at the relevant date, Division 2 of Part 6 applies — regulations 64 to 70. Which method applies depends on the form of the benefit:
- benefits payable only as one or more lump sums — regulation 65;
- benefits paid as a pension — regulation 66, applying Schedule 5 (life pension), including separate treatment where a guarantee period is yet to end, and using survival, pension and reversion valuation factors;
- a pension paid because of invalidity — Schedule 7, which has its own factor tables;
- a fixed-term pension — Schedule 8; a lifetime or fixed-term annuity — Schedules 6 and 9;
- a pension with a future lump sum also payable — regulation 67 and Schedule 10.
A reversionary pension — one that continues to a surviving spouse — is valued differently from one that ceases on the member’s death, which is why reversion valuation factors appear throughout these Schedules. A pension in payment is often the single most contested valuation issue in a family law matter involving an older public sector scheme.
What changed on 23 July 2026
The Family Law (Superannuation) Amendment (2026 Measures No. 1) Regulations 2026 (Cth) commenced on 23 July 2026 and made two changes that matter in practice.
First, better information about pensions in payment. Where a member is receiving a pension other than an allocated or market linked pension, the trustee’s response to an information request must now also state whether a lifetime pension is payable due to invalidity, whether the pension has a guarantee period and how much of any guarantee period remains, whether the rules governing the pension permit a reversionary beneficiary who is a non-member spouse, and if so what proportion of the ongoing payments would be payable to such a beneficiary on the member’s death — regulation 112(1)(c)(iia), (iva), (v) and (vi). Those are precisely the inputs the guarantee-period and reversion factors turn on, so the amendment removes a common cause of unreliable valuations. The new requirements apply to an application under section 90XZB made on or after 23 July 2026 — regulation 149.
Second, ministerial directions to certain trustees. A new Part 7A (regulations 97A to 97D) supports the power in section 90XT(3A) of the Act for the Minister to direct the trustee of a plan in which there is an interest covered by an approval instrument — that is, an instrument approving a method or factor made under regulation 62(1), 70(1) or 79(1) — and it applies whether the approval instrument was made or commenced before, on or after 23 July 2026 — regulation 148. When relying on an approved method, check the currency of the approval rather than assuming it is unchanged.
The repealed Family Law (Superannuation) Regulations 2001 (Cth) should not be cited. Things done under those Regulations continue to have effect as if done under the current instrument — regulation 145.
Approved scheme-specific methods and factors
The general Schedule 3 method does not apply to every interest. Regulations 62 and 70 permit methods or factors to be approved for determining the gross value of particular superannuation interests, and those approvals are contained in the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2025 (Cth). Schedule 1 of that instrument covers Commonwealth public sector plans, including:
- Part 1 — the Commonwealth Superannuation Scheme (CSS);
- Part 2 — the Public Sector Superannuation Scheme (PSS);
- Part 3 — the Defence Force Retirement and Death Benefits Scheme and earlier and associated schemes;
- Part 4 — the Military Superannuation and Benefits Scheme (MSBS);
- Part 5 — the Parliamentary Contributory Superannuation Scheme;
- Parts 6 and 7 — the Judges’ Pensions Act scheme and the Governors-General Pension Scheme.
Later Schedules deal with State public sector plans, including New South Wales (Schedule 2) and Victoria (Schedule 3). Each Part is typically divided into definitions, interests in the growth phase, interests in the payment phase, and factors. Victorian public sector interests are dealt with in our guide to ESSSuper and family law property settlements.
Military schemes deserve a specific mention. DFRDB and MSBS interests are administered by the Commonwealth Superannuation Corporation and are valued under the approved methods in Parts 3 and 4 of Schedule 1, not the general Schedule 3 method. Invalidity pensions, reversionary entitlements and the interaction with periods of service before and after the relationship are all common issues, and the correct starting point is the scheme-specific instrument.
The Approval also deals with the transition factor used in working out the amount to be paid to the non-member spouse where the interest changes phase — regulation 79 and Schedule 11 of the Regulations, and section 6 of the Approval.
Where the Regulations do not provide a method
If the Regulations provide for the determination of an amount in relation to the interest, the court must determine the amount in accordance with the Regulations. If they do not, the court must determine the value of the interest by such method as it considers appropriate — section 90XT(2) of the Family Law Act 1975 (Cth). That is the gateway through which actuarial evidence is usually led, and it is also why a party cannot simply assert a preferred figure: the method has to be justified.
Some interests cannot be split at all — the Regulations define an unsplittable interest in regulation 14, and section 90XT(1) excludes such interests from splitting orders.
Implementation and drafting
A defined benefit split is only as good as its implementation. Points that regularly cause difficulty:
- Procedural fairness and the 28-day notice. The court cannot make an order binding the trustee unless the trustee has been accorded procedural fairness in relation to the making of the order — section 90XZD(1). For consent orders, rule 10.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) requires written notice to the trustee not less than 28 days before the draft consent order is lodged or the Application for Consent Orders is filed, setting out the terms of the order sought and the trustee’s right to object. If the trustee does not object within 28 days of receiving the notice, the application may be filed; if the trustee consents in writing earlier, the parties need not wait — rule 10.06(2) to (4). The orders should be provided to the trustee in the form the trustee is asked to implement.
- Base amount or percentage. In defined benefit schemes a percentage split may behave quite differently from a base amount, because the underlying benefit is formula-driven rather than balance-driven. The choice should be a considered one.
- What the non-member spouse actually receives. Depending on the scheme, the entitlement may be paid or rolled over, or a separate entitlement may arise within the scheme itself. It remains superannuation and remains subject to preservation requirements — section 90XZ.
- Fees. Trustees may charge reasonable fees in respect of a payment split or the operation of the Part — section 90XY and regulation 98. Who pays should be addressed in the orders.
When to get advice
If either party holds a defined benefit interest, obtain advice before agreeing to a figure. The valuation is technical, the scheme-specific instruments can displace the general method, and the difference between a well-drafted and a poorly drafted order is often measured in years of retirement income rather than dollars today.
Holt & Macdonald advises separating couples across Ringwood and Melbourne’s eastern suburbs. This guide is general legal information about family law; it is not actuarial, taxation or financial product advice. See our Family Law page for how we work.
