By Darryl Browne -
Snapshot
- In recent months, a host of decisions by the Australian Financial Complaints Authority regarding payment of a deceased member’s death benefit offer insight into the different methods by which payment of the death benefit can be decided, and AFCA’s role in that process.
- This article, the second in a two-part series, examines AFCA’s review of trustees’ discretionary decisions, including how dependency, member wishes and competing claims are weighed in practice.
- It also explores AFCA’s dual role in making findings of fact and determining questions of law, and highlights the practical implications of its less formal fact‑finding processes for practitioners.
Examples of a trustee’s discretionary decisions
Many of the decisions before the Australian Financial Complaints Authority (‘AFCA’) involve a review of the trustee’s discretionary decisions.
In Case 12-00-1057902 (concerning AustralianSuper Pty Ltd), the trustee decided there were two eligible beneficiaries: the member’s son and the member’s brother (by reason of satisfying the requirements for an interdependency relationship). The member died in September 2022. He had made a non-binding (and therefore not effective) nomination in 2009 in favour of his son (as to 80 per cent) and sister (20 per cent). The trustee, mainly having regard to the brother’s financial dependency on the member, initially decided to pay 90 per cent of the member’s death benefit to the brother and the remaining 10 per cent to the son.
