Super as a caretaker for your family

A lot of people don’t realise that your super comes with a key benefit, outside of your retirement, which for many people, is death insurance. 

A morbid topic, but what does happen to your family, and those dependent on you, if you pass away unexpectedly?

While you may not have a large amount in your super right now, it will grow over time, and if you couple this with death insurance, it is worthwhile to have nominated who should get your super and death benefit in the event of your death. 

Here are four things most people do not know about their super and what happens to it if you pass away: 

1. The law has a say in who gets your super! 
   
   Your superannuation must be passed to either a ‘superannuation dependent’ or legal personal representative. By superannuation dependent, we mean anyone that is financially dependent on you, for example your spouse, child or someone in an interdependency relationship. 
2. Your will won’t cover your super 
   
   Many people don’t realise that superannuation is not an estate asset and is governed by different laws than those that cover your other assets such as property, investments and savings. 
   
   This means that your will does not automatically cover your superannuation. Making sure your will and super beneficiaries are aligned and up-to-date is important if you have specific wishes you want to happen on your death, or you want to prevent any kind of confusion or disagreements on your death.
3. More than one third of disputes over super are related to death beneficiaries 
   
   For some of us, we have complex, blended families, and it is this factor that gives rise to more than one third of superannuation complaints with the Australian Financial Complaints Authority. You can remove the likelihood of this happening by putting in place a binding death nomination*, which can remove all confusion and save your loved ones from uncertainty at a time of stress and loss.  
4. It’s not just about your super balance 
   
   For some people, they don’t consider their balance significant enough to worry about. But with regular contributions and time, your super will grow into one of your most valuable assets. 
   
   Moreover, you may also have death insurance as part of your super benefits, which can be a large amount¹. Making sure you are proactive and future-thinking is important so that you can take care of your loved ones when you’re no longer around. 

There are 2 types of beneficiaries available:

Preferred (non-binding) Nominations

If you make a preferred nomination, the trustee of REI Super will consider your nomination when deciding who will receive your death benefit.

Binding Nominations²

If you make a valid binding nomination in accordance with the legislative requirements, the trustee of REI Super must pay your super to the beneficiaries you have nominated in the proportions specified.  A binding nomination is a legally binding document and as such, must be on the appropriate form.   

How to update your beneficiaries

With REI Super you can update your preferred beneficiaries online. Simply logon and navigate to beneficiaries and update the details.

A binding death nomination form will be available on the REI Super website from 1 October 2019.  A binding nomination has to be updated at least every 3 years; we will let you know when it is about to expire.  

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¹ As premiums are paid from your superannuation savings, your superannuation balance will reduce by the premium paid each year.

² Binding Death Benefit Nominations will be available from 1 October 2019.