Super is an asset, so it's worth thinking about what happens to it if you should pass away.
A beneficiary is the recipient of your death benefit. You can nominate one or more beneficiaries, or the Emergency Services Superannuation Board (The Board) can determine them according to the governing rules of the fund.
Everyone's situation is different. It's worth spending the time now to make the right decisions for you to ensure your wishes are carried out. Also remember, if you have multiple ESSuper accounts, you will need to nominate a beneficiary for each account.
Why would I bother making a beneficiary nomination?
People choose to make nominations for a range of reasons, including:
- Wanting control in how their benefit is divided, and who receives it.
- Reduction of stress and conflict for their families at the time of their death.
- Eligible dependent/s who will receive the benefit under the default rules doesn't need the money.
- Clarity in cases where there are complex family relationships, especially in the case of ex-spouses and current defacto partners.
What if I don't make a nomination?
The Board will determine who your benefit goes to, and how it is apportioned. This means that your benefit may be divided equally amongst your dependants, or paid to your Legal Personal Representative who will distribute it according to your Will.
The Board is governed by a comprehensive set of rules, but each case is different and there are no guarantees about who will receive your benefit.
Who can I nominate?
You can choose one or more of your dependants, or your Legal Personal Representative.
People who are considered your dependants include:
- Your spouse or defacto partner, as defined by Commonwealth, State and Territory laws.
- A child of yours, or your spouse's or defacto's child (limitations apply to defined benefit schemes).
- Any person who, in the opinion of the Board, was dependant on you or had a legal right to look to you for financial support.
To be considered as a beneficiary, your nominee must be classed as a dependant (according to the rules above) at the time of your death.
If you choose to nominate your Legal Personal Representative, they will distribute your benefit as part of your estate, according to your Will.
Tax on death benefits
The tax treatment of death benefits varies depending on who receives your benefit (i.e. your spouse, other dependants or your estate) and whether it is paid as
a reversionary pension or as a lump sum.
Generally, if a lump sum is paid to a tax dependant beneficiary, the benefit will be paid tax-free. A ‘tax dependant’ beneficiary includes your:
- legal spouse or de facto (including same sex couples)
- children under 18 years of age
- any person who was financially dependent on you at the time of death, and
- any person who had an interdependency relationship with you at the time of death.
In the Accumulation and Income Stream Products you are able to nominate an adult child (via a beneficiary nomination). An adult child is not a tax dependant unless they were financially dependent upon you at the date of death.
We recommend getting legal and financial advice prior to making decisions like this. If you would like us to set up a meeting with an ESSSuper Financial Adviser* for you, please contact us.
What is a binding nomination? What is a non-binding nomination?
A non-binding nomination is a suggestion to the Board. They aren't obliged to carry out your directions, but will consider your nomination when making their decision regarding the distribution of your benefit.
A binding nomination is just that. Your nomination directs the Board regarding who receives your benefit, as well as the percentage they receive, and they are bound to the execution of your wishes relating to the distribution of your benefit. Binding nominations are only valid if all relevant criteria are met.
ESSSuper members can make a binding and/or a non-binding nomination depending on the particular fund rules:
||Can I make a non-binding nomination?
||Can I make a binding nomination?
|ESSS Defined Benefit Fund
|Retirement Income Stream
and Working Income Stream
Can I change my mind?
Sure. Just complete and submit a new beneficiary nomination form. There are no limits to the number of times you can change your beneficiaries.
A couple of tricky bits to remember
- Not all funds are eligible for binding nominations (see the table under the 'What is a binding nomination? What is a non-binding nomination?' section above for a guide).
- Binding nominations last for 3 years only, and must be renewed by submitting a new nomination form.
- If a binding nomination expires (after 3 years) it will be treated as a non-binding nomination.
- If the person nominated by you is no longer your dependant or Legal Personal Representative at the time of your death, the nomination changes from binding to non-binding.
- If you nominate your Legal Personal Representative as your beneficiary, they may receive a lower benefit than if you elected for the benefit to be paid directly to your dependants. You may decide that this is still a better option for you, depending on who you would like your benefit to go to. If you aren't sure, seek legal advice before making your decision.
- There may be tax implications for your choices, so we encourage you to seek advice before making a decision. We can arrange for you to meet with an ESSSuper Financial Adviser* if you like.
Factsheets and guides
The following documents discuss beneficiary nominations for specific funds.
If you're ready to make your nomination, log in to submit the appropriate request for each of your accounts.
What do you do now?
It's easy for most members to make, update, or cancel a non-binding death benefit nomination through the Account / Beneficiaries menu of Members Online.
To make, update, or cancel a binding death benefit nomination, download your personalised form through Members Online. Remember: binding nominations expire after three years, but you can renew an existing binding death benefit nomination through the Account / Beneficiaries menu of Members Online.
If you receive a pension or regular Income Stream payments from us, you can make, update, or cancel a reversionary death benefit nomination through the Account / Beneficiaries menu of Members Online.
If you'd like some more information, the 'What is a binding nomination? What is a non-binding nomination?' section above to read more about the types of beneficiaries you can nominate for your scheme.
Alternatively, you can contact us or book a virtual appointment with one of our Member Education Consultants to discuss your options. If you'd like some advice applicable to your personal situation, we can arrange a meeting for you with a Financial Adviser*. Don't forget to consult your legal representative too.