Hello Karen, Thank you for your question. Yes, that is my understanding. However, there are challenges in paying pension benefits. If the appointment is not binding on the death grant, the trustee also has the discretion to whom your super is paid. If you have a binding application, it is important to know whether or not it expires and what the impact will be. If you have a recidivism pension, it is automatically paid to the beneficiary of the relapse. Chris Related Posts Decay vs. ClearLaw has previously warned of the risks associated with creating binding death benefit claims that do not comply with all the requirements set out in the Pension Act, including the 3-year expiry requirement (click here to learn more). Unlike personal property, pension savings are not paid in a person`s will in the event of death. Indeed, the legal owner of the balance of the pension or annuity is the trustee of the pension fund.

The member is only the beneficial owner. An application for an enforceable death benefit is a written notice to the trustee of your super fund, in which a beneficiary is specifically named for your super death benefit. As mentioned earlier, you can appoint a dependent or legal personal representative to receive your super, and a dependent representative can be a spouse, child, or other person (or persons) who are financially dependent on you at the time of your death. A death contract is an agreement between a member of the SMSF and the fiduciary of the SMSF which, when signed, is part of the act of the SMSF. The agreement sets out how the smsf member`s benefits are to be paid after the member`s death in the same way as a binding death notice. However, since the agreement is supported by the SMSF act – and does not claim to be a binding obituary under the Pension Act – it only expires: SMSF members can now arrange binding death agreements that do not expire after 3 years – the agreement binds the trustee (the trustees) until the member revokes them. Hopefully, this article helped to understand the difference between binding and non-binding beneficiary applications and to understand who can be a binding or non-binding beneficiary. The reason for this is that people are generally not as consistent in updating their superannual pension applications as they are in updating their will, which carries the risk that the proceeds of the superannual pension will not be paid in accordance with their wishes and relationships at the time of their death. While many pension funds offer binding and non-binding applications for beneficiaries to members, some pension funds only offer a member the opportunity to make non-binding appointments. The main way to do this is to make a binding or non-binding appointment of a beneficiary and make it available to your trustee so that they have an official record of the person you explicitly asked for their super. Hi Adam, no commitment means telling your super fund who would be your beneficiary of your super/pension when you die (like a wish list). The trustee will review who you have appointed, but may pay your benefit to another person if your relationship(s) have changed since the date you submitted the non-binding application.

A binding nomination means that the Super Fund must pay your remaining Super/Bond balance to the one who was appointed on your binding appointments, regardless of any changes in relationships that have occurred since the time you made the nomination and died. A binding application may need to be updated every 3 years. Both binding and non-binding applications are perishable. The meaning of binding and non-binding is explained below….