Keeping your super safe
Super funds are becoming a target for criminals, with identity theft one of the biggest risks. Here’s some important steps you can take to make sure your account is safe.
work
You can make sure your super goes to the people you choose. Find out why that might be important to you.
You might have heard about court cases where people have contested the listed beneficiary of a deceased person’s superannuation.
Often these disputes could have been avoided if the member had updated their choice of beneficiary to their super fund while they were alive. And that could have prevented a whole lot of heartache for those left behind.
Although it’s a grim topic, nominating who gets your super when you die and how to update this nomination is one of the most important things you need to know.
Safeguard your super for those you love
When you open a super account, you’re asked to nominate who will receive your money when you die.
You have three choices:
- no listed beneficiary (HESTA makes the decision on who gets your super)
- a preferred (non-binding) beneficiary (HESTA will use this information to help make the decision on who gets your super, but it doesn’t guarantee your preferred person will receive it)
- or a binding beneficiary (HESTA must give your super to your nominated beneficiary, provided this nomination is valid).
Who you can nominate to receive your super
HESTA has a legal responsibility to make sure your super goes to your dependants or your legal personal representative.
Your dependants include:
- your spouse - by marriage or de facto
- your child
- a person who is wholly or partially financially dependent on you
- a person with whom you have an interdependency relationship.
Your legal personal representatives include:
- the executor of your will, or
- the administrator of your estate.
For more information on what classifies as a dependant or legal personal representative, read How super works (pdf).
Income Stream members
If you are an Income Stream member, you can also opt to nominate a reversionary beneficiary. This means your income stream payments will automatically revert to the person you nominate on your death. Find out more in the Income Stream PDS (pdf).
Don’t be a cautionary tale: why it’s crucial to keep on top of your nominations
We often speak to members who want to leave their super benefits to their adult children. In this case, a 69-year-old member made a preferred nomination to her three adult independent children. She also had a will and an enduring power of attorney. After the member died, her children made a claim to receive their mother’s super benefit. The super fund had to determine if there were any other potential beneficiaries and investigated if there was anyone else who could make a claim.
There was. The member had been living with a de-facto partner for several years. They both had their own children and kept their finances separate. They had also agreed not to claim anything from one another’s estates upon death. And their wills specified these arrangements.
Despite this, the partner claimed against the deceased member’s super. The super benefit – all of it – was paid to the de-facto partner and not to the children. That’s because none of the children were financially dependent on the member at the time of death, and a partner is the most likely person to need super benefits to fund their retirement – which is the sole purpose of superannuation.
So what could this member have done differently? By making a binding nomination to all three adult children or to her legal representative, she would have provided greater certainty about who received her benefits.
The value of advice
This case study is not as uncommon as you might think. Remember, everyone’s situation is different and it’s important you get the right advice about planning your financial future.
you might also like
Income streams – the flexibility to work for you
In the current economic environment, the ability to adjust the income you’re drawing down from your income stream according to your needs is a key benefit.