Choosing Your Super Beneficiaries: What to Know and Why It Matters

Most people assume their super will go to their family if something happens to them. Often, that assumption is wrong. 

Superannuation is generally not covered by your will. Unless you tell your fund who should receive your super, the decision may rest with the fund’s trustee, not you. For an asset that often includes years of contributions plus a life insurance payout, that is a lot to leave to chance. 

Here is what you need to know. 

What is a super beneficiary? 

A super beneficiary is the person or people you nominate to receive your superannuation, plus any insurance in your account, when you die. Together these are called your death benefit. 

According to the ATO, you can usually nominate one or more of your dependants, or your legal personal representative, to receive it. Under super law, a dependant is: 

• Your spouse or de facto partner. 

• Your child, of any age. 

• Someone in an interdependency relationship with you, such as a person you lived with and shared financial support or care with. 

If you have no eligible dependants, the trustee may pay the benefit to your legal personal representative for distribution through your estate.

Why doesn’t my will cover my super? 

This is the point most people miss. Superannuation is generally not an estate asset, so it does not automatically get distributed according to your will. Prime Super notes that the rules governing super are quite different from estate planning laws. 

Your super only forms part of your estate in limited cases, such as when you make a valid binding nomination directing it to your legal personal representative, or when the trustee decides to pay it to your estate. 

The result is simple. You can have a carefully written will, but it may not control where your super goes unless your nomination and estate planning arrangements work together. Nominating a beneficiary with your fund is how you close that gap. 

Binding or non-binding: what is the difference? 

There are two main types of nomination, and the difference is how much certainty you have. 

• Non-binding: tells your fund who you prefer. The trustee considers your wishes but is not obliged to follow them. It is easy to make and update. 

• Binding: if valid, legally requires the trustee to pay your death benefit exactly as you nominated. It gives the most certainty but must meet strict rules to stay valid. 

Binding nominations come in two forms. A lapsing nomination must be renewed periodically, typically every three years. A non-lapsing nomination does not expire, though you can change it any time. 

One caution. A binding nomination can only go to a valid dependant or your legal personal representative. To leave your super to someone who is not a dependant, such as a parent, sibling, or friend, you generally nominate your legal personal representative and set out your wishes in your will. This can have tax consequences, so understand it first. 

Why does nominating a beneficiary matter? 

Nominating your beneficiaries gives you control over where your super goes, reduces delays for your family, and helps your death benefit reach the people you intend. The main benefits are: 

• You have greater certainty. A valid binding nomination generally requires the trustee to pay your death benefit according to your nomination.

• May reduce delays. A clear nomination can help your fund assess and pay the benefit sooner, when your family is already under strain.

• You avoid unintended outcomes. Without a nomination, your super may go somewhere you would not have chosen. 

• You gain peace of mind, knowing the money you built over your career will reach the right people. 

Super and estate planning rules can be complex, and what suits one person may not suit another. If you are unsure which nomination is right for you, Prime Super offers access to super specialists who can provide personalised support. To book a chat, visit here.

How do you nominate your beneficiaries? 

The process is usually free and straightforward. In most funds you can: 

• Log in to your fund’s online member portal to make or update a non-binding nomination. 

• Complete a nomination form, which for binding nominations generally must be signed and witnessed to be valid. 

• Make sure the percentages across your beneficiaries add up to 100 per cent. 

• Confirm your beneficiaries are dependants under super law, or nominate your legal personal representative if they are not. 

Rules for a valid binding nomination differ between funds, so check your fund’s requirements. 

When should you review your beneficiaries? 

A nomination made years ago may no longer reflect your life today. Prime Super recommends reviewing your beneficiaries after major life events, including: 

• Marriage, divorce, or separation. 

• The birth or adoption of a child. 

• The death of someone you previously nominated. 

• Starting a new job or consolidating super accounts. 

The ATO also recommends confirming your beneficiary as part of its super health check at least once a year. 

How can Fuse Recruitment help? 

At Fuse, we work with candidates across a wide range of industries and career stages. We understand that a strong career involves more than the role you are in today. It involves making confident, informed decisions about your financial future as well. 

As we continue to build our candidate resources, we are committed to connecting you with the right information at the right time, including practical matters like superannuation that often get overlooked. Whether you are exploring new opportunities or keeping your options open, our team is here to support you. 

For more information about managing your super, including how to nominate your beneficiaries, visit primesuper.com.au or call Prime Super on 1800 675 839. 

Important Notice 

This email is current as at the date of sending and is subject to change. It contains general information only and does not take into account your specific objectives, financial situation, needs or personal circumstances. You should seek personal advice or professional financial advice, consider your own circumstances and read our Product Disclosure Statement (PDS) before making a decision about Prime Super. A copy of the PDS and Target Market Determination is available by calling 1800 675 839 or by visiting primesuper.com.au/pds. 

Prime Super Pty Ltd ABN 81 067 241 016 AFSL 219723 RSE L0000277 is the Trustee of Prime Super ABN 60 562 335 823 RN 1000276.