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Make sure your super ends up in the hands of the person – or people – you want it to

Unlike directly owned property or shares, super doesn't automatically form a part of your estate if you pass away. Instead, your super benefits are paid under the rules of the super fund.

Who can you nominate?

In order for a death benefit nomination to be binding, it must be 'valid'. One of the requirements of validity is that only eligible dependants can be nominated. For the purposes of super law, a dependant includes:

  • a spouse (including de facto)
  • children of any age, including stepchildren, adopted or children from previous relationships
  • someone who is financially dependent on you
  • someone in an interdependency relationship with you (i.e. living with you and one or both provide the other with financial, domestic and personal support) at the date of your death 
  • a Legal Personal Representative (i.e. on behalf of your estate).

You can nominate who you want to receive your super, but not all nominations are the same. The table below compares non-binding and binding nominations. It’s important to know the differences, because the type of nomination you have in place determines how your super benefit will be paid.

Binding vs non-binding nominations

Binding (lapsing and non-lapsing) nominations

DetailsBenefitsLimitations
  • The Trustee must pay your death benefit to the nominated beneficiaries and/or the Legal Personal Representative and in the proportions set out in your nomination.
  • Your beneficiary can request that death benefits be paid as a pension instead of a lump sum. 
  • Non-lapsing nominations do not need to be renewed.
  • The definition of an eligible dependant is restricted to a spouse, child, financial dependant, interdependent or Legal Personal Representative (your estate). 
  • Lapsing nominations need to be renewed every three years, and if expired in the event of death the Trustee will use its discretion to determine who your benefit is paid to. 
  • Both lapsing and non-lapsing binding nominations only apply to the account specified in the nomination.

Non-binding nominations

DetailsBenefitsLimitations
  • Tells the Trustee who you want your benefits to be paid to, and it will be considered, but it is not binding on the Trustee.
  • Even though the Trustee will use its discretion in deciding who to pay your benefit, it places great importance on your  nomination.
  • Your beneficiary can request that death benefits be paid as a pension instead of a lump sum.
  • You don’t have to renew a non-binding nomination.
  • It is not binding on the Trustee of the super fund, so the Trustee will use its discretion to decide who your death benefits are paid. This means benefits could be paid to an eligible dependant that you didn't intend to receive it.

Provide certainty with binding nominations

A binding death benefit nomination is a legally binding nomination that allows you to advise the Trustee who is to receive your super benefit in the event of your death.

The key advantage is that your death benefits will be paid to the dependants you choose and in the proportions you choose. There are also other important advantages:

  • Death benefits are likely to be paid more quickly.
  • There are fewer requirements for additional paperwork, which assists family members during this difficult time,
  • Nominated beneficiaries may choose to retain the benefit in superannuation rather than as a cash payment. 

Review your nominations today

When was the last time you reviewed your nominated beneficiaries? Make sure your nominations are up-to-date.

Additional information for protected members

A protected member is a member of the Fund who is, or becomes, subject to a court order for the guardianship, administration and management of their estate. As a protected member, your affairs will be managed by a guardian or private manager who will have been appointed to manage and protect your estate.

If you do not have a valid binding nomination in place at the time of your death, the Trustee will pay your death benefit to your Legal Personal Representative (i.e. your estate).

For further information please refer to your products General Reference Guide.

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