December 2013 Newsletter-Who are you leaving your Super to when you die?

Who are you leaving your Super to when you die?

Reversionary vs non-reversionary pensions

What is a Reversionary Pension?
A pension that is reversionary automatically continues (or reverts) to a dependent after the death of a member who is in receipt of an account-based pension or transition to retirement (TTR) pension. 

Who can you nominate to be your reversionary beneficiary?
A member in pension phase can nominate anyone who is a Superannuation Industry Supervision (SIS) dependent to be a beneficiary. These include;


  • A spouse (including de facto)
  • A child (including step-child) under the age of 18, or between 18-25 and are financially dependent on the deceased just prior to death
  • A person who lived in an 'interdependency relationship' with the deceased
  • A person who was financially dependent on the deceased


Why would you have a reversionary pension?

A reversionary pension can significantly reduce the likelihood of a challenge from other beneficiaries, as there is technically no death benefit being paid out of the fund.

There are also taxation benefits associated with a reversionary pension, as the assets supporting the members account will remain in the concessionally taxed superannuation environment, meaning the value of your super nest egg will be maximized for the benefit of your remaining beneficiaries and dependents.

Recent changes to the law for non-reversionary pensions
Changes to superannuation legislation which applies from 1 July 2012 means that trustees of superannuation funds that pay non-reversionary pensions now have greater flexibility to dispose of assets after the death of the pensioner and retain the tax exemption which applied to the pensioner prior to their death.

The decision to adopt a reversionary or non reversionary pension is not straightforward and will depend on the circumstances of the particular case. Please contact your GCC advisor for more information.

If you have any questions about setting up your superannuation and pensions, please contact the team at Goodwin Chivas & Co.

Share by: