Australians warned to pay attention to superannuation paperwork

MILLIONS of Australians are putting their superannuation at risk by not following-through with proper, and legally binding, beneficiary paperwork, according to a nation-wide survey.

Research conducted by Super Consumers Australia, an advocate for people on low and middle incomes in Australia’s superannuation system, shows that more than one in three Australians with super say they haven’t properly defined their fund’s ‘death benefit nominations’, telling their super fund who should receive their money when they die.

Just one in four have successfully made a binding death benefit nomination.

These numbers mean that over 6.5 million Australians risk long delays for their loved ones, with the possibility the money may not be distributed according to their wishes, even if it is stated in their wills.

“The fact that so many Australian families are facing this uncertainty is a red flag; this is a system that’s too hard to understand and navigate,” said Xavier O’Halloran, CEO of Super Consumers Australia.

“Without a valid binding nomination, funds have to decide who your money goes to, which leaves families in limbo, sometimes waiting months or years to access money they are entitled to, and it’s not good enough.”

Super Consumers warns that many Australians believe they’ve secured their wishes with a binding nomination, when in fact they may not have, or it may have expired.

The current system can be difficult to navigate, mainly due to each superannuation fund laying out its own rules, often using confusing terminology, including ‘binding’ vs ‘non-binding’, ‘lapsing’ vs ‘non-lapsing’, and ‘reversionary’.

Mr O’Halloran has called for a Federal Government review of how death benefits work in superannuation, focusing on consistency and avoiding potentially family-shattering arguments during probate actions.

“This is one of the basics that super funds should be getting right,” said Mr O’Halloran.

“People work their whole lives to build up their super and they should get to decide where it goes when they pass away.”

By Thomas O’KEEFE