"I have nominated my beneficiaries for my superannuation, should anything happen, but I've been told there may be more to the process. How do I ensure payment goes to those I've nominated?"
- Question from Cathy in Rosewater, SA
Top answer provided by:
Ron Pratap
Thank you for your question, Cathy.
If you have nominated beneficiaries for your superannuation, there are a few steps that you should consider ensuring that any payments go to those you have nominated.
Keep your nomination up to date
It is important to review and update your beneficiary nomination regularly, especially if your personal circumstances change (such as getting married, having children, or getting divorced). This will help ensure that your superannuation benefits go to the people you want them to. Also, some providers have a lapsing nomination option which means you will need to update your nomination every 3 years, so it is important to ensure all your contact details are up to date for any superannuation or insurance policies you hold.
Check your superannuation fund's requirements
Each superannuation fund may have different requirements for beneficiary nominations. Make sure you understand your fund's requirements and follow them correctly.
Be specific and clear
When making your nomination, be specific and clear about who you want to receive your superannuation benefits, and the percentage or amount you want each person to receive as the total amount should add up to 100% if this is going to multiple beneficiaries.
Consider seeking legal advice:
If you have a complex financial situation, or if you are unsure about the best way to make a beneficiary nomination, consider seeking legal or financial advice. A professional can help ensure that your wishes are clearly stated and that your nomination is legally valid.
Keep your nomination with your other important documents
Keep a copy of your beneficiary nomination with your other important documents, such as your will or estate plan. This will help ensure that your wishes are followed in the event of your death.
There are also 3 main beneficiary options to consider including:
Binding beneficiary
This ensures the nomination is binding to the Trustee of the superannuation fund or insurer and usually requires the form to be witnessed by 2 individuals who are not the nominated parties. There is a lapsing or non-lapsing option which means the nomination will stay in place unless revoked or if this is lapsing, will need to be updated every 3 years.
Non-binding beneficiary
This type of nomination will be considered but isn’t legally binding on the super fund or insurer as they will have final discretion on payout and this could be an issue if anyone contests the payout. Your super fund/insurer will decide who gets your money in the end.
Reversionary nomination
This type of beneficiary nomination only applies to income streams from retirement accounts. This means your beneficiary will continue to receive your pension payments. They'll be paid to them in the same amount and frequency as they were paid to you, until the balance runs out. You can only nominate your spouse or de-facto spouse for this type of nomination.
I hope this answers your questions and as mentioned, please seek legal or financial advice if you are unsure about what is best for your situation or require further assistance to ensure your wishes are met and benefits are paid out to the right beneficiaries.
Thanks,
Ron Pratap
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Comments1
"Good summary Ron"
Liam 15:41 on 22 Mar 23