Secure your super
Published in the Daily Telegraph- September 2014 by Dale Gillham
You probably take comfort knowing part of your weekly pay is locked away in superannuation for your retirement.
On the flip side, we tend not to think about what can go wrong for everyone around us if we die before our time.
It is natural to assume loved ones will get your super along with any death benefit owing. It is also natural to assume the money will go to them with no fuss, but that is not necessarily the case. Let me show you what can occur if you don't set a binding nomination.
Recently, I was told a big super fund withheld payment to the family of a man who died suddenly. He was only 50, the sole bread winner with a wife and two children, and had long managed the family's money.
The wife, trying to hold her family together, was suddenly faced with another problem she had a lot of bills to pay and no regular money coming in. Further, the bank account only had enough to meet expenses to the end of the following month. Put yourself in her situation and see how hard it would be to cope with losing your husband, not to mention the additional financial burden on you.
Her husband had a sizeable super fund with a death benefit, but accessing the money wasn't as straightforward as you might think. The death was sudden and along with a copy of the will, the super fund needed a coroner's report, which takes around six to seven weeks. They had all they needed to assess the case about seven weeks after the man's death. But that's when the problems really started.
The husband's binding nomination had lapsed and without it the super fund could take weeks or months to release the funds.
Pleading for help, the wife contacted the super fund a number of times to be told the paperwork had to be signed off in another state and that this took time.
What created even more stress was she contacted the other office and discovered what she was told was not true. She was now desperate, had little money left in the bank, and was borrowing from friends.
After 13 weeks she was told she had to wait for the super fund committee to approve the release of the funds and this would take another two weeks.
Where is compassion in this process? Why didn't the fund permit the release of even a small sum of money given they had the paperwork?
The moral of the story make sure you set up a binding nomination for your own superannuation, to save your loved ones a lot of stress, because anything can happen.
Back to Articles