Nobody likes to think about what would happen when they die. But your super is likely to be one of your most valuable assets so it’s important to think about who it would go to after your death. If you want to make sure your super money ends up with the people you choose, it’s important to keep your super up to date by nominating your beneficiaries.
What’s a beneficiary?
A beneficiary is the person who receives your super death benefit. Your super death benefit is made up of your balance in your account plus any insurance payment (if you have insurance through your super).
Beneficiaries are certain people who can benefit from your super after your death. These are set out in superannuation law. They are:
- Your spouse – your husband, wife or partner who you live with
- Your child (including adopted children and the children of your partner)
- A person with whom you have in an interdependent relationship at the time of your death. ‘interdependent relationship’ means a close personal relationship between two people who live together, where one or both provides financial, domestic, and personal support of the other
Typically, your parents, siblings, nieces, nephews, friends, neighbours, or housemates do not qualify as eligible beneficiaries, unless you had an interdependent relationship before your death.
With the purpose of super in mind, the financial support you provide to your partner or children is given preference when deciding who to pay your benefit to.
To give you peace of mind that your super death benefit will be paid to your loved ones when you pass away, there are a number of beneficiary options you can choose from. Figuring out which one is right for you and your situation can take some time, but it’s important to know what’s available and make an informed decision.
If you would like to choose what happens to your Vision Super accumulation or pension account when you die, you can elect one of the following options:
- Make a ‘preferred beneficiary’ nomination, also known as a non-binding nomination
- Make a ‘binding’ nomination or
- Nominate a reversionary beneficiary (only available on a Vision Super Income Stream).
Preferred beneficiary (non-binding) nominations
A preferred beneficiary nomination, also called a ‘non-binding nomination’ is an informal way of letting us know who you’d like your death benefit to be paid to.
If you die, Vision Super will take into consideration your wishes, your family structure, your personal relationships, your Will, and any other details needed to understand your personal circumstances. We’ll use this information to determine if you have any financial dependents, non-financial dependents, or interdependent relationships.
We’ll take your wishes into account, but the Trustee’s assessment and the final outcome may be different from what you requested in your preferred nomination.
It is simpler to make a preferred beneficiary nomination than a binding nomination, as they can be made through your online account as well as by completing and returning a nomination form – and they don’t require two people to witness the declaration. But they’re also not as powerful as a binding nomination, which makes sure your wishes are followed – you should think carefully about which option is right for you.
Binding nominations
A binding nomination is a formal instruction about how you want us to pay your death benefit. You can only make a binding nomination to your spouse, child, interdependent or your estate – or any combination of these.
An example of why you might want to make a binding nomination would be if you wanted your super to go to your adult kids, not your partner. Your partner is automatically assumed to be your financial dependent, and without a binding nomination the Trustee may pay them your whole death benefit. However, if you could make a binding nomination to ensure your adult children who aren’t financially dependent on you get some or even all of your death benefit. Vision Super would not be able to consider the financial needs of your spouse and must pay the benefit to your adult children like you instructed.
Like all formal documents, a binding nomination must be properly completed for it to be valid. We check this when you make the nomination and again if there is a claim. To be valid, a binding nomination must:
- Be completed on our binding nomination form and received by the Trustee
- Only nominate a dependant, interdependent, or legal personal representative
- Have a total distribution value that adds up to 100%
- Be properly witnessed by two adults who are not nominated as a beneficiary.
Binding nominations expire three years from the date they are signed. You can renew them, or make a new one at any time by completing a new nomination form. We will let you know when your binding nomination is due to expire. If you don’t renew it, it converts automatically to a preferred nomination.
Reversionary beneficiary (only available on a Vision Super income stream)
When you set up your pension, you can nominate your death benefit to be paid to your spouse or child as a pension payment. They’ll get regular payments just like you did, until there’s no money left in the account. You can only make a reversionary nomination at the time you set up your pension account, and you can’t change it afterwards. You should also be aware that this type of nomination may have Centrelink or superannuation balance cap implications for the person getting the pension.
We recommend you seek financial advice if you aren’t sure about how this type of nomination my affect your partner’s or children’s circumstances.
What happens if I don’t have a nomination?
Without a nomination, the Trustee is responsible in deciding your beneficiaries and how much each of them will get.
Financial planning
Vision Super Financial Planners are superannuation specialists and understand the intricacies of what choices are available to you. Their job is to help members plan for their retirement. If you choose to obtain advice from a Vision Super Financial Planner, you may be charged a fee, but if any fees are applicable, this will be discussed with you before any financial advice is provided. Call our Member Services team on 1300 300 820 Monday to Friday 8:30am to 5pm to set up a time.