Superannuation fund trustees have been cautioned against treating parents or guardians differently with respect to death benefit distributions to minor beneficiaries.
Superannuation Complaints Tribunal (SCT) chair, Jocelyn Furlan has used the tribunal's quarterly update to tell fund trustees that they will need to have sound reasons for excluding parents/guardians from such process.
"The Tribunal expects that trustees will have considered the circumstances of each minor beneficiary and have reasons for their decision that the parent/guardian is unsuitable to be the trustee of the benefit," she wrote.
Furlan said trustees needed to be careful about applying rules without regard to individual circumstances, especially if different rules were applied depending on whether the surviving parent/guardian was themselves dependent on the deceased member.
"In the Tribunal's view, there is unlikely to be a sound reason, relating to the ability to be a trustee of the benefit, for treating a surviving dependent parent/guardian differently from a surviving non-dependent parent/guardian, all other things being equal," she wrote.
"In the absence of evidence that the parent/guardian is unfit to care for the beneficiary's physical, mental and emotional wellbeing, significant independent evidence would be required to indicate that that person is unfit to care for the beneficiary's financial wellbeing."
"Where no concerns have been raised about the parent/guardian's capacity to care for the beneficiary generally, requiring him or her to seek approval and funds from a third party trustee of the benefit to provide for the minor beneficiary's needs is a significant impost, in an environment that has already been affected by a death that is usually premature and often unforeseen," Furlan wrote.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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