By Darryl Browne and Michelle Dixon -
Snapshot
- On the death of a member, the trustee of a superannuation fund must pay their death benefits in accordance with the rules of the fund.
- If the member doesn’t have a valid binding nomination, then usually the trustee of the fund determines who will receive the benefit.
- The death benefits can be paid to the legal personal representative or a member’s dependant(s) at the time of the member’s death.
- The trustee determines if there are any dependants before deciding who to pay.
- A complaint about the trustee’s decision is usually made to Australian Financial Complaints Authority.
The governing rules of most superannuation funds allow a member to nominate who receives their benefits if they die (known as death benefits).
Some members don’t make a nomination at all; others make a nomination which is not binding on the trustee of the fund (generally called non-binding or preferred nominations); and, some make a nomination which is not binding at the date of the member’s death. Some superannuation funds don’t provide for nominations.
In all circumstances where there is no valid binding nomination at the date of the member’s death, the governing rules of the superannuation fund provide the mechanism for deciding who receives the death benefits. Except for statutory superannuation funds where legislation determines who receives the death benefit, the governing rules provide that the trustee of the fund determines who receives the death benefit in the absence of a binding nomination.
