Have you chosen what happens with your super after you’re gone?
In a Defined Benefit (DB) scheme, you won’t ever have to set up a beneficiary. A beneficiary is the person your super goes to if you die, and if you have an accumulation account or an account-based pension, you have to tell your super fund who you want it to go to.
In a DB account however, your super automatically goes to your estate, so you just need to ensure you have a valid and up-to-date will.
Lifetime pension beneficiaries
If you have a Defined Benefit Lifetime pension, you receive a fortnightly income for the rest of your life, indexed for inflation (with CPI) twice yearly. After your death, your spouse (if you have one and provided they qualify) will generally continue to receive two-thirds of this regular payment. A spouse is your partner who you live with, whether you’re legally married or not, and includes same sex relationships.
You don’t need to set up a beneficiary for a lifetime pension. Pension payments will stop and your lifetime pension account will be closed once you and your spouse have pass away. Depending on how long you and your spouse live for, the total amount of payments you receive may be more than the lump sum you used to purchase the pension.
Why having a will is important
With a DB account, since your benefit is paid to your estate via your executor/executrix (also called you legal personal representative), and distributed according to your will, it’s important to ensure that you have a valid will and that it is kept up to date.
If the superannuation death benefit is paid to your estate and your will does not make adequate provision for it or you pass away without a valid will, your estate including super proceeds may be distributed in line with state-based intestacy laws.
Estate law can be complex, and most of us are not experts – so let a qualified financial adviser help you. You can see a Vision Super Financial Planner or another adviser for help. If you’d like an appointment with one of our team, call us on 1300 300 820 Monday to Friday between 8:30am and 5pm and we’ll set you up with a meeting.
We can provide limited financial advice relating to your Vision Super account at no extra cost. Fees will apply in other circumstances; these fees will be discussed with you before any advice is provided.