Nominating beneficiaries

Unlike directly owned property or shares, super doesn't normally form a part of a member's estate. Instead, super benefits are paid out under the rules of the super fund.

Under the IOOF Employer Super fund rules, death benefits are paid to the member's Legal Personal Representative unless they have made a binding death benefit nomination or non-binding death benefit nomination. However making a valid binding death benefit nomination is the only way to be sure the death benefits are paid direct to the preferred beneficiary(ies) and in the proportions the member wants.

Put simply, a binding death benefit nomination is one of a variety of nominations – outlined in the table below – which legally allows a member to advise the trustee of IOOF Employer Super who is to receive their super benefit when they die, provided they meet certain eligibility criteria.

Type of nomination Description Positives Limitations
No nomination
  • Without a nomination, the trustee will pay the benefit to the Legal Personal Representative.
  • However if the estate is insolvent the trustee will generally pay to any eligible dependants in proportions the trustee considers appropriate.
  • Members don't need to worry about renewing their nominations.
  • Without nominating dependants, there is a chance super benefits could go to someone a member didn't intend them to go to.
Non-binding nomination
  • This is where a member can tell the trustee whom they want their benefits to go to and it will be considered by the trustee, but it is not binding.
  • The nomination is not binding so it can be adjusted by the trustee if a member's situation has changed. For example, if you get divorced after your nomination, the trustee can take that into account.
  • Even though the trustee makes the final decision, it places great importance on the member's wishes in the nomination.
  • Members can request that death benefits be paid as a pension instead of a lump sum.
  • Members don't have to renew a non-binding nomination.
  • The nomination is not binding on the trustee of the super fund, so the trustee will make the ultimate decision where the benefits are paid. Consequently, benefits could go to an eligible dependant a member didn't intend to receive it.
Binding nomination
  • If a binding nomination is undertaken, the trustee must pay benefits to the nominated dependants and/or the Legal Personal Representative and in the proportions set out.
  • The binding nomination is only valid for three years, after which it must be reconfirmed.
  • A member can be assured that the trustee will pay benefits to the dependents whom they want it to go to.
  • Members can request that death benefits be paid as a pension instead of a lump sum.
  • The definition of an eligible dependant is restricted to a spouse, child, and financial dependant or interdependent.
  • The nomination must be renewed every three years which can be easy to forget.
Reversionary benefit nomination
  • This applies when opening a pension account, allowing a member to nominate who will automatically get their pension after they die.
  • A pension can continue with very little interruption, meaning that a beneficiary can continue to receive income during a tough time.
  • The reversionary nomination can only go to a spouse or a child under 18; or another financial dependant or inter-dependant.
  • A reversionary benefit nomination cannot be changed once a pension starts.

Who can a member nominate as a beneficiary?

There are rules around who can receive a superannuation benefit – it's not solely at a member's discretion. The beneficiary must be a 'dependant'.

A dependant includes:

  • a spouse (including defacto or same-sex)
  • children of any age, including step-children, adopted or children from previous relationships
  • someone who is financially dependent on the member
  • someone in an interdependency relationship with the member
  • a Legal Personal Representative (ie on behalf of their estate).

To nominate a beneficiary for your super account, download either a binding death benefit or non-binding death benefit nomination form from our documents library or log into your account.