Nominating a beneficiary lets you have your say about who receives your super and any death insurance you may have if you pass away. (Together, your super and death insurance payment are known as a ‘benefit’, which is how we’ll talk about it here.)
This is what you need to know to get your beneficiaries sorted.
Choosing a beneficiary
There are rules around who can receive your benefit, which means your choice of beneficiary is limited to one or more dependants or your legal personal representative, such as:
- Your legal or de facto spouse/partner
- A person who is in an interdependency relationship with you
- Your child
- Your legal personal representative. This might be the executor of your will or the administrator of your estate.
These rules apply to both binding and non-binding nominations. Note that different tax treatment can apply for different types of beneficiary.
Let’s look at the pros and cons of nomination choices.
You can make a non-binding nomination quickly and easily through MemberOnline.
This type of nomination acts as a guide only, as we’re bound by superannuation and trust law when making a decision. We’ll consider your nomination, but there’s a chance your super and insurance benefit could end up going to someone other than your preferred nominee/s.
For example, if we believe you have dependants with greater needs than those you’ve nominated, we could decide to pay them your benefit. Or we could change the percentage to what we consider to be appropriate (in line with our legal obligations).
A non-binding nomination doesn’t expire, so if you change your mind for any reason, you’ll need to change your nomination too. In this case, the onus is on us to find out who was dependent on you at the time of your death and decide how to pay out your benefit.
A binding nomination limits surprises. As long as it's valid at the time of your death, your super fund has to do exactly what it says.
There’s a bit more paperwork involved as you’ll need to complete the Binding beneficiary nomination form and have it witnessed.
A binding nomination is only valid for three years. This might seem frustrating if your beneficiaries stay the same but could be a blessing in disguise if your circumstances change.
If you change your mind at any time, you’ll need to fill out a new form to update us.
If you don’t make a nomination
If you don’t choose a beneficiary, we’ll decide who receives your death benefit in accordance with superannuation and trust law. We’ll investigate if you have any dependants and make a decision based on who we determine has the greatest needs.
If you need help
Not sure why you’d make one type of beneficiary nomination over the other? We can help you understand how it works and who you can nominate, so you can make the best choice for your circumstances.
Just book an appointment online to speak to a financial planner or call us on 1300 360 149. This sort of advice is covered by your membership and won’t cost any extra.