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In this edition of ‘It depends’, partner Scott Hay-Bartlem talks about what happens if you have both a reversionary pension and a binding death benefit nomination for your super.
Hello, welcome to It Depends. Today we’re talking about what if I have both a reversionary pension and a binding death benefit nomination for my super?
So, both a binding nomination and a reversionary pension lock in our superannuation death benefit payment. For a reversionary pension, it means your existing pension continues, after you’ve died, to a particular person. A binding death benefit nomination is a separate document that says when I die, my superannuation is paid to this person.
Yes, you can and I have strategies where I’ve had both a binding death benefit nomination and a reversionary pension apply in different circumstances. The catch is making sure that they are consistent and not going to work against each other.
Well, this is your it depends. So, in a retail or industry fund, they will have a hierarchy. In SMSF world, you need to read the deed, read the deed, read the deed. The Cooper Grace Ward deed has the reversionary pension with priority. Other deeds do different things. Some deeds say nothing and they’re the real problems because there’s no cases and no legislation that sets out, which applies over the other one, and that’s when we end up fighting in court.
So, if we’ve got reversionary pensions and binding death benefit nominations, we need to know what we’ve got. We need to make sure that they are consistent and we need to deal with them to the extent there is any inconsistency. They are problems when they don’t say the same thing and they’re working against each other.
If you’ve got any questions about binding death benefit nominations, reversionary pensions, call one of our super team.
Thanks for watching It depends.
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