Building up your super is one of the ways that you can finance your eventual retirement. But what will happen to your super if something were to happen to you prior to that?

Much like how a will dictates what will happen to your physical assets, death benefit nominations ensure that superannuation benefits are properly dealt with in the event that a member dies. Generally, this means that the super provider pays the remaining super to their nominated beneficiary (if the rules of the provider allow you to nominate a beneficiary). This nomination may be non-binding or binding.

Binding Nomination

In the event that a binding nomination is allowed, you can nominate one or more dependents, or your legal personal representative to receive your super. In the event that the deceased does not make a nomination, the trustee of the provider may be able to:

• Use their discretion to decide which dependant or dependants the death benefit is paid to.
• Make a payment to the deceased’s executor of the deceased estate for distribution according to the instructions in the deceased’s will.

Non-Binding Nomination

In the event that the nomination made by the deceased is non-binding, the trustee of the provider may:

• Use their discretion to pay in accordance with the non-binding nomination.
• Use their discretion to decide which dependant or dependants the death benefit is paid to.
• Make a payment to the deceased’s legal personal representative (executor of the estate) for distribution according to the instructions in the deceased’s will.

Superannuation death benefits do not automatically form part of the deceased’s estate and are generally not covered by the person’s will. Preparing a death benefit nomination should be done in conjunction with the member’s will so that all financial aspects of the estate are dealt with consistently.

How Often Should a Death Benefit Nomination Be Made? 

Superannuation death benefit nominations are not a compulsory requirement but can give those who survive you financial certainty in how to handle your super in the event of your death.

Depending on a member’s circumstance, personal events in their life should trigger a review of existing nominations just as they would trigger a review of a person’s will. Additionally, when the member statements are provided, presuming they contain the nomination data (based on the technology being used), it is also a good time to see if anyone is missing from the existing nominated dependents or if the proportion needs to be changed.

If you believe you’re the beneficiary of a deceased person’s super or are the trustee of a person’s estate, you should contact their super provider to make them aware that they are deceased, and to release their super.