Millions of Australians risk having superannuation land into the wrong hands when they die
What happens to your superannuation after you die?
Millions of Australians don’t actually know the answer to this question – and their money could be at risk of landing into the wrong hands.
The average Australian dies with around $296,700 in their super fund. Louie Douvis
Do you have a story? Contact reporter April Glover at april.glover@nine.com.au
Sobering research released by Super Consumers Australia has revealed about 15.5 million Australians do not have a binding death benefit nomination (BDBN) with their super fund.
The survey found another 67 per cent of people had not been contacted by their fund in the past 12 months about making a binding death benefit nomination, “missing a critical opportunity to help members decide who receives their super after they die”.
A BDBN is a legal instruction telling your super fund who gets your money and life insurance payout when you die.
It can be binding or non-binding, which generally lapses after three years.
Most people will list a family member, like their husband or wife or a child.
Without this, the nominated trustee of your account can pay out the money at his or her discretion.
This could mean your retirement funds may not go to the person you want.
About 15.5 million Australians do not have a binding death benefit nomination (BDBN) with their super fund. iStock
According to the Australian Taxation Office (ATO), the majority of older Australians do not have a super balance when they die.
But for the minority aged 70 or older with a super fund, the average balance is between $100,000 to $149,000.
“Again, funds are dropping the ball on customer service and it is leading to real consumer harm. Reducing avoidable delays and uncertainty for grieving families is a no brainer,” Super Consumers Australia chief executive Xavier O’Halloran said.
“So why aren’t funds doing more to help members decide where their super goes after they die?”
There is no law that requires fund members to have a BDBN.
It is completely optional, however the ATO strongly recommends it to control who gets your money when you die.
Super Consumers Australia has called on the federal government to legislate mandatory standards which require funds to proactively communicate with members about BDBNs and process death benefits within clear timeframes.
“Too many Australians only learn about the importance of a binding death benefit nomination after someone they love has died,” O’Halloran added.
“An effective reminder from a super fund could help people make an informed decision, reduce delays and make an incredibly difficult time a little easier for grieving families.
“We know that some funds have had a lot of success with nomination campaigns.
“It’s past time for the government to make this mandatory for all funds.”
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
Share a tip-off, video or photo with us
Most viewed in Australia
‘Unimaginable loss’: Two children killed in horror crash on the way home from school
Talia and Ebony were physically abused by their mother. Then she was made into a TV star
Blanche d’Alpuget, writer and widow of Bob Hawke, dies aged 82
Justine lost her brother suddenly. Then an unexpected email arrived
