Millions of Australians lack binding super death nominations, risking unwanted payouts

Super Consumers Australia’s latest research indicates that about 15.7 million people lack a binding death benefit nomination, allowing trustees to determine the distribution of superannuation assets. The problem was highlighted by Brooke Allan’s experience with Cbus, where a non-binding nomination resulted in the entire $130,000 benefit being awarded to the deceased’s son rather than to Allan and her cousin as intended.

The survey of 5,000 members showed 67 percent had not been contacted by their fund about making a binding nomination. ASIC has increased monitoring of claim processing times, noting only modest improvements in payouts within six months. The government is reviewing whether to impose statutory timeframes for super funds to respond to death-benefit claims. Industry bodies and some funds are urging reforms to simplify nominations and make them perpetual.