Pension Beneficiary Options
Payment of death benefits
If you die while you are a member of the NSF Super Pension Division, the Trustee is required to pay your death benefit, equal to your withdrawal balance (less any taxes, fees or costs applicable at the time of payment) to your beneficiaries, as a lump sum or pension.
You can make a binding, non-binding or a reversionary beneficiary nomination:
|Binding nomination||Non-binding (your preferred) nomination||Reversionary nomination|
|What does it mean?||A binding death nomination is legally binding on the Trustee of NSF Super. This means that on your death, your NSF Super benefit would be paid as you instructed, as long as your nomination is valid and any named beneficiaries are dependent upon you at the time of your death||This type of nomination will guide the Trustee as to your wishes, however, the Trustee makes the final decision as to whom the benefit will be paid. The Trustee is guided by superannuation legislation and must ensure your benefit is paid to your dependants. The Trustee will take into consideration your circumstances and the circumstances of your potential beneficiaries at the time of your death||A reversionary beneficiary will continue to receive your pension if you die (although the pension income may need to be adjusted based on their age). In most cases, your reversionary beneficiary can elect to cash the pension in for a lump sum benefit|
|How many beneficiaries can I choose?||You can nominate as many beneficiaries as you wish||You can nominate as many beneficiaries as you wish||You can only choose one reversionary beneficiary|
|Who can I nominate as a beneficiary?||You can nominate your legal personal representative (ie.Estate) and/or any dependants*||When nominating your beneficiary, please ensure that you nominate a dependant* beneficiary. The Trustee of NSF Super can only consider a non-dependant where there is no dependant(s) or estate||Your nomination must be a spouse or a child. A child reversionary beneficiary must be under age 18, or aged between 18 and 25 and financially dependent on you (pension must be taken as a lump sum when they reach age 25) or disabled|
|Can I change my nomination?||You can make and change a binding nomination at any time. To make a binding nomination, you must complete and submit a valid Binding Death Benefit Nomination form. Any binding nomination you make will remain in place for a period of three years from the date you made the nomination (unless you cancel it or submit a new binding nomination) and would need to be renewed prior to expiry to remain valid. It’s important to regularly review a binding death benefit nomination and keep it up to date as your circumstances change, as a valid nomination cannot be overridden by the Trustee or your dependents||You can change your nomination at any time by completing a Member Change of Details form or through your Pension MemberAccess account||You are not able to change a reversionary beneficiary nomination, as it can only be made at the time you apply to commence a pension|
If, at the time of your death, you did not nominate a beneficiary or your nomination is invalid, the Trustee will look for eligible beneficiaries to receive your death benefit.
Tax payable on death benefits depends on individual circumstances. We recommend that you seek licensed financial advice about how tax would apply to you and your beneficiaries.
Death benefits paid to dependants* are tax-free. If paid to a non-dependant, the taxable component of the lump sum benefit is taxed at 15% plus Medicare Levy.
Any death benefits paid to your spouse, former spouse or child (of any age) may additionally include an anti-detriment payment. An anti-detriment payment broadly represents a refund of the 15% contributions tax paid by the deceased member during their lifetime.
Proposed changes from 1 July 2017 (not yet law at time of writing):
The government has proposed removing the availability of the anti-detriment payment as part of death benefits from 1 July 2017.
*Under the Superannuation Industry (Supervision) Act 1993, a dependant is defined as:
The member’s spouse including de facto and same-sex spouse (but excluding a previous spouse);
Any children of the member including adopted, step, ex-nuptial and adult children; and
Any other person with whom the person has an interdependency relationship.
Under superannuation law, two persons are considered to have an interdependency relationship if:
They have a close personal relationship; and
They live together; and
One or each of them provides the other with financial support; and
One or each of them provides the other with domestic support and personal care.