Nominating Beneficiaries for your Superannuation

Because there are stringent rules superannuation fund trustees must follow in the event of the death of a superannuation fund member, you need to give careful consideration to the nomination of your beneficiary.

The Superannuation Industry Supervision Act stipulates that your nominated beneficiary has to be a spouse, defacto spouse, a dependant child, someone who is financially dependant upon you at the time of your death or your personal legal representative.  That is, the executor of your estate.

You can make a binding nominations and provided these are valid in accordance with the SIS Act, the superfund trustee must pay the benefit to the nominee(s).  In the case of no nomination or an invalid nomination, the trustee is allowed to exercise discretion as to who may receive the payment.  If the trustee cannot resolve the appropriate beneficiary, the benefit may be payed to the executor of your estate to deal with the payments in accordance with the instructions expressed in your will.  If you have died 'intestate,'  that is - without a Will, then the Public Trustee will pay the benefit in accordance with the set formula for the distribution of the proceeds of an estate.  This may not necessarily be as you intended your benefit to be paid.

For the above reasons it is important to make a valid beneficiary nomination.  If you elect for the nomination to be binding on the trustee, your estate planning objectives can be designed with greater certainty.

Please give me a call on (03) 6235 5528 if you would like to discuss the above information.