Superannuation beneficiaries and binding nominations

Nominating beneficiaries

Superannuation law allows you to nominate beneficiaries who will receive your superannuation and any insurance attached to it in the event of your death. There are several different ways in which nominations can be made and only one way in which the nomination can be binding. There are strict requirements to be met before a nomination is binding. Not unlike when you make a Will, binding nominations can lapse over time or become invalid on the happening of certain events.

Binding nominations

The way in which nominations can be made can differ depending on the rules of the superannuation trust fund that you are a member of.  Some super funds will have their own forms to complete.  No matter what the rules of the super fund say, for a nomination to be binding it must be:

• in writing;
• signed and dated by the member;
• signed by the member in the presence of 2 witnesses each of whom have turned 18 and are not mentioned in the notice;
• contain a declaration signed and dated by the witnesses stating that the notice was signed by the member in their presence;

The absence of any of these requirements can invalidate a notice.

Revoking a binding nomination

A binding nomination can be revoked by a member at any time.  It will otherwise lapse after 3 years from the date it was signed or last confirmed or amended by the member.  Some super funds can provide for a shorter period in which case the shorter period applies.

A binding nomination can only be made to a person who is the legal personal representative or dependent of the member.  A legal personal representative can be the executor of a Will or other legally appointed representative.  A dependant is limited to a spouse, child or other person in an interdependent relationship.

It follows that if someone ceases to be a spouse then the nomination ceases to be of any effect. So an ex-husband or ex-wife who is not in an interdependent relationship cannot generally be a beneficiary under a binding nomination.

If a super fund has acted in accordance with a binding nomination to pay a death benefit to someone, you can challenge that payment if the above requirements have not been met.