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Super fund members are often surprised to find that they cannot bequeath their super under their Will. This is because superannuation is a trust structure and as such it lies outside the scope of your Will.
As a Fund member, you have two options for directing the distribution of your superannuation benefits upon your death:
When you select a non-binding death benefit nomination, the Fund’s Trustee can only pay benefits to specified beneficiaries, in keeping with superannuation law.
These superannuation beneficiaries can either be:
Where there is a non-binding nomination of dependants in existence, the Trustee will seriously consider the expressed wishes of the member regarding distribution of benefits. However, the Trustee does have the discretion to make the ultimate decision as to whom benefits will be paid.
When benefits are paid to your legal personal representative, they will usually follow the estate distribution instructions set out in your Will.
It is important to note that if extenuating circumstances arise following your death, e.g. consideration of other family members, a different payment distribution to that which you have nominated may be made by the Trustee.
A binding death benefit nomination takes away the Trustee’s discretion to determine how your superannuation benefits will be paid out.
With a binding nomination you can nominate precisely who, amongst your dependants, you would like to receive your super benefits when you die. In this case, the Trustee is obliged to follow your directions.
A binding death benefit nomination has strict conditions for its use and cannot be made by a minor i.e. someone under age 18. It must:
Under superannuation law, binding death benefit nominations must also be renewed every three years to be valid.
You should consider seeking professional advice before making or cancelling a binding death nomination to consider the suitability of the nomination for your circumstances.
When you start an account based pension, you can nominate that, in the event of your death, any money remaining in your account is to be paid as a continuing pension to an eligible dependant. This is called a ‘reversionary’ pension. This type of beneficiary nomination is binding on the Trustee, but the normal conditions for binding nominations do not apply. For example, your nomination does not lapse after three years.
Outlined below are rules that apply to making reversionary beneficiary nominations on an Australian Catholic Superannuation account based pension account. Reversionary beneficiary nominations are binding on the Trustee.
If you nominate a person to be your reversionary beneficiary and you die while still in receipt of an account based pension, the Trustee will continue to pay a pension to that reversionary beneficiary, if they survive you.
Eligible dependants who can receive a reversionary pension include:
You cannot nominate a child age 18 or over unless they are:
Where a pension is payable to a child aged 18–25, the child will receive the pension until they reach age 25, unless the account balance is reduced to zero earlier.
Once the child turns 25, a lump sum will be paid to them, unless the child is disabled. In this case, the pension can continue to be paid to the disabled child until the account balance expires.
An interdependency relationship exists between two people where:
If two people have a close personal relationship, but don’t live together or provide this support or care because either or both of them suffer from a physical, intellectual or psychiatric disability, they may still be deemed to have an interdependency relationship. Before any benefit can be paid to a person with whom you had an interdependency relationship, the Trustee requires a statutory declaration that sets out the nature of your interdependency relationship.
Yes, the reversionary beneficiary can choose to commute (i.e. stop) that pension and then take a lump sum—with the exception of a child revisionary. There may be tax consequences of taking this action, which depends upon the age of the reversionary beneficiary and how soon after the member’s death this decision is made. Consequently, it is very important to seek advice before taking such action.
Your nominated reversionary beneficiary must be an eligible dependant at the date of your death. If this is not the case, then the Trustee will use its discretion as to who will receive your death benefit.
Before you make the decision to nominate a reversionary beneficiary, we recommend you speak to a licensed financial planner, as there may be Centrelink or the Department of Veterans’ Affairs implications.
To make an appointment with a financial planner at Australian Catholic Superannuation, call us on 1300 658 776.
If we receive written notification of your death, we will transfer your account balance into the Fund's Cash and Term Deposits option. This is designed to protect your beneficiaries from the impact of any movements in investment markets while your death benefit payment is being finalised.
If you have nominated that an eligible dependant is to receive a reversionary pension when you die, that dependant will need to download and complete an RetireChoice investment switch form (PDF) if they wish to select an investment option other than Cash and Term Deposits.
To make a non-binding nomination or to alter the dependants whom you wish to receive your superannuation benefits, simply login to your Members online account. Once logged in, simply select 'Your account', then 'Beneficiaries' from the left-hand menu options onscreen and enter any new details.
Alternatively, you can download and complete a Nomination of beneficiaries form (PDF). You can also use this form if you wish to make or alter a binding beneficiary nomination.
Note: A separate death benefit nomination is required for each account held with the Fund.
Contact us if you would like more information regarding nominating beneficiaries.
Nomination of beneficiaries(PDF 304KB)
RetireChoice investment switch(PDF 243KB)
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