6Meaning of defined benefit interest

6 Meaning of defined benefit interest

(1) A defined benefit interest is: (a) a superannuation interest that: (i) a member spouse has in an eligible superannuation plan; and (ii) is an interest in respect of the whole of which the member spouse is entitled, when benefits in respect of the interest become payable, to be paid a benefit that is, or may be, defined by reference to one or more of the amounts or factors mentioned in subsection (3); or (b) a component of a superannuation interest that: (i) a member spouse has in an eligible superannuation plan; and (ii) is a component in respect of which the member spouse is entitled, when benefits in respect of the interest become payable, to be paid a benefit that is, or may be, defined by reference to one or more of the amounts or factors mentioned in subsection (3); or (c) a superannuation interest that: (i) a member spouse has in the scheme provided for by the Australian Defence Force Cover Act 2015; and (ii) is in the payment phase; or (d) a superannuation interest that: (i) a member spouse has in the scheme provided for by Division 3 of Part 1 of Chapter 4 of the Federal Circuit and Family Court of Australia Act 2021; and (ii) is in the payment phase. (2) However, a superannuation interest, or a component of a superannuation interest, is not a defined benefit interest because of paragraph (1)(a) or (b) if: (a) the only benefits payable in respect of the interest or component that are defined by reference to one or more of the amounts or factors mentioned in subsection (3) are benefits payable on death or invalidity; and (b) there are no other circumstances in which benefits payable in respect of the interest or component are, or could have been, defined by reference to the amounts or factors mentioned in subsection (3).

Note 1: This subsection has the effect that paragraphs (1)(a) and (b) do not apply to a superannuation interest or component if defined benefit factors:

(a) are only used to calculate death or invalidity benefits in respect of the interest or component; and
(b) would not be used to calculate benefits in respect of the interest or component that would become payable in other circumstances, such as on age retirement or the termination of employment.

Note 2: However, this subsection does not prevent a superannuation interest or component mentioned in paragraph (1)(c) or (d) being a defined benefit interest for the purposes of this instrument (even if paragraph (1)(a) or (b) could also apply to the superannuation interest or component).

Note: Example 1: Benefits in respect of a superannuation interest of a member spouse are payable on retirement based on the balance of the member’s account. However, on death or invalidity the benefit is to be defined by reference to amounts or factors mentioned in subsection (3). The member retires on invalidity and the benefits that become payable to the member are then defined by reference to those amounts or factors. The superannuation interest is not a defined benefit interest because defined benefit factors only applied, and could only have applied, in the circumstance of the death or invalidity of the member spouse.