Your super will grow to become one of your most valuable assets. So it’s important you understand where it’ll go when you’re gone. Did you know that ‘binding nominations’ can empower you to tell your super fund exactly that? Here are five things you may not (but probably should) know about them.
1. Your Will won’t cover your super
Your Will covers assets you own (like property, investments and savings). Your super is governed by superannuation law and is held in a trust by the trustee of your super fund—meaning it usually won’t automatically form part of your Will. This is why different rules apply and why it’s important to let us know how you’d like your death benefits distributed.
2. Even with a small balance, it matters
Are you just starting out? You might have a small super balance now, but it’ll grow over time. Plus, you could also have a significant amount of death insurance cover through your super, which would be paid out on your death. So it’s worth making sure you know what’ll happen to your super when you’re no longer around.
3. A valid binding nomination gives you the final say
Some family arrangements are complex and the number of blended families is increasing. Industry-wide, this is a common factor in many of the death benefit disputes coming before the Superannuation Complaints Tribunal. You can control who can share in your death benefit by making a valid binding death benefit nomination. (Note: Binding nominations aren’t available to UniSuper members with Commercial Rate Indexed Pensions or Defined Benefit Indexed Pensions.)
4. A binding nomination doesn’t have to be forever
We offer lapsing and non-lapsing binding death benefit nominations. A lapsing nomination expires after three years, whereas a non-lapsing nomination doesn’t expire (unless you change or revoke it). You can revoke or change your binding nomination at any time.
If you’re a Flexi Pension member, you can also select a reversionary beneficiary nomination (just be sure to consider any Centrelink impacts a reversionary beneficiary might have on your Age Pension). If you make a valid reversionary nomination, the balance of your pension will continue to be paid to your nominated dependant after your death as a pension rather than a lump sum.
5. You can’t nominate just anyone
To be valid, a beneficiary must be a ‘superannuation dependant’ or legal personal representative. A dependant may include your spouse, child, someone in an interdependency relationship with you or someone financially dependent on you.
What to do now
- More than half of our members have a beneficiary nominated on their UniSuper account. (Fund statistics, September 2017. Across all UniSuper products.)
- According to the Superannuation Complaints Tribunal, almost one-third of all complaints are about death benefits.