A child or step-child may not automatically receive a benefit from the deceased’s superannuation fund

The contributor to a superannuation fund is usually entitled to nominate a third party to receive the benefits due after the contributor’s death. This nomination is often not binding on the trustee of the superannuation fund and is merely a declaration of the contributor’s wishes.

Although the trustee of the superannuation fund has full discretion to distribute the benefit to whomever they feel is most deserving, in practice the trustee will usually honour the nomination.

A trustee will usually consider two (2) key factors in deciding how to distribute the benefit:

• What the contributor wanted and who was nominated by the member to receive the benefit; and
• Who had a financial reliance on the member when he/she died.

Each superannuation fund will have different internal rules as to how a benefit is to be paid out and how such a decision can be contested. If you feel that the trustee of the fund has wrongly distributed the benefit, you should contact the trustee of the fund as soon as possible.

A trustee of a superannuation fund must usually distribute the pension scheme within two (2) years of the date of the deceased’s death.

If no nomination was made by the deceased and no satisfactory beneficiary can be found, the superannuation benefit will usually be given to the deceased’s executor for distribution with the remainder of the estate. Click here for more information.

Binding Nominations

However, especially in the case of the larger public funds, it is possible for a contributor to make a binding nomination and then the trustee is bound to distribute the benefits in accordance with the contributor’s wishes. There are special rules applicable to binding nominations, and so you should consider legal advice if the issue is important to you.

For most funds except for self-managed superannuation funds, it is possible to apply to the Superannuation Complaints Tribunal if you are unsatisfied with the decision of the trustee.  The complaint itself is a legal document and you may be best to get legal advice to give your complaint the best chance of a successful decision for you.

Self-Managed Superannuation Funds

If the superannuation fund is a self-managed (private) fund the rules working out how a fund should be distributed can be much more complicated, and you may have more rights than you think, especially if the trustee has not acted in accordance with the rules.

A lawyer can assist you in liaising and negotiating with the trustee of any type of fund and assisting with any complaint.  Select one who is well experienced in superannuation funds.