ASIC Commissioner Simone Constant has urged Aussies to make sure they have a nomination in place. · Getty/ASIC
A majority of Australians have not taken a critical step to help financially protect their loved ones. The corporate regulator is now urging the public to check and make sure they have nominated a binding beneficiary in their superannuation account today.
New analysis by the Australian Securities and Investments Commission (ASIC) has found that as many as 88 per cent of people don’t actually have a binding death benefit nomination in place. That’s despite more than 30 per cent believing they have taken the important step.
“Making a binding death benefit nomination is one of the most important steps that Australians can take to financially protect their loved ones,” ASIC Commissioner Simone Constant said in a statement to Yahoo Finance.
“Without it, there’s no guarantee your super will go where you intend, and it can delay payments at an already difficult time.”
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A binding death benefit nomination determines where the money from your super goes when you die. As the name suggests, it is legally binding, but some will lapse or have to be renewed every three years.
In its review of 10 major super funds, ASIC found the most common type of nomination was non-binding (31 per cent), followed by non-lapsing (6 per cent) and lapsing (4 per cent).
The regulator is today issuing an updated report on its 2025 review of superannuation trustees and their process of death benefit claims handling as it reminds workers to make sure they have set up an ongoing binding nomination for when the worst case scenario happens.
The update from ASIC acknowledges that some improvements have been made, but ongoing weaknesses in the death benefit claims handling practices of straggling super trustees risk undermining confidence in the industry’s readiness to service Australia’s ageing population, the regulator said.
The distribution of funds to loved ones in the event of a death is much more likely to be settled quickly and easily when there is a binding nomination in place.
The follow up review by ASIC found only a 3 per cent improvement across the industry in the number of claims that took six months or less to process.
Without a binding death benefit nomination, the trustee of your super fund decides where your superannuation goes, and this could be “totally different” to what your will says, James Glissan from Glissan & Associates previously explained to Yahoo Finance.
“It’s definitely one of the factors that leads to a lot of family provisions claims, because obviously, once the big nest egg is removed from the intentions of the will, that tends to cause a lot of animosity and a lot of fights between people,” he said.
Glissan gave the example of a Western Australian man who left everything in his will to his kids. Despite this, his super fund paid more than $300,000 to his de facto partner instead of his kids because his binding death benefit nomination form had lapsed.
Older Australians are being urged to make sure they have take the important step with the superannuation fund. · Drazen_ Australians urged to check with their superannuation fund
If, like most Australians, you don’t know if you have a nomination in place, ASIC Commissioner Simone Constant is urging you to contact your super fund.
“Consumers can also take the initiative and contact their super fund to check whether they have made a binding death benefit nomination – and if not, they can make one,” she said.
“This could also serve as an opportunity to review your superannuation to ensure you are being valued as a customer and member. To make sure it is working in your best interests, such as assessing insurances, fees and investment options. Also check to make sure you have found any lost super and that you aren’t paying for unnecessary duplicate accounts.”
For those wanting more information, the MoneySmart website has resources to better understand what happens to your super if you die, how to make a death benefit claim, as well as other related tips.
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