Self-managed super funds and binding death benefit nominations

Our final determination is entitled SMSFD 2008/3 Self Managed Superannuation Funds: is there any restriction in the Superannuation Industry (Supervision) legislation on a self-managed super fund trustee accepting from a member a binding nomination of the recipients of any benefits payable in the event of the member's death?

Specific super law requirements regarding binding death benefit nominations do not apply to SMSFs.

The governing rules of an SMSF can allow members to make binding death benefit nominations that are binding on the trustee, even if the nominations do not meet specific super laws.

However, a member can not nominate a person who under super law is not able to receive the death benefits of that member. The member must choose a person allowed under the super laws. Otherwise the death benefit nomination will not be binding.

Generally, people that the member can nominate are either:

• the member’s legal personal representative
• one or more of the member’s dependants.

Last Modified: Monday, 6 July 2009