Superfund exercises discretion against member’s wishes

DAVID has been living with his de facto wife for 10 years.

He has two daughters to a previous relationship and his partner has three daughters of her own.

As part of his estate planning, David executes a non-binding death benefit nomination, leaving the whole of his superannuation to his two daughters equally.

When David unexpectedly passes away, the superfund writes to all of the parties, informing them that because the nomination was “non-binding”, the fund will decide on how the superannuation is to be divided and asks them to provide information and identification in support of their position.

The superfund identifies David’s partner, his youngest daughter and the youngest stepdaughter as being financially dependent upon him at the date of his death and although the fund acknowledges that the eldest daughter and the other stepdaughters have standing to make a claim, decides that because they were not financially dependent on David at the date of his death, they had no expectation to receive any provision from his superannuation.

Despite the fact that David recorded his wishes to the effect that his two children were to receive his super, the fund decides to pay 65% of the superannuation to the de facto spouse, 25% to the youngest daughter and only 10% to the eldest daughter.

David’s eldest daughter refers the superfund’s decision to the Australian Financial Complaints Authority (AFCA) and statements and submissions are filed by all concerned.

A year after David’s death, AFCA affirms the superfund’s decision, accepting that the 10% “token” payment was fair and reasonable in the circumstances.

It is important to record your wishes in a “binding” nomination and that you review your nomination regularly.

If YOU would like a particular issue addressed, please email Manny at manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.

 

By Manny WOOD, Solicitor