Cbus introduces streamlined rules for paying death benefits

The industry fund has implemented new rules to simplify death claims and cut processing times after receiving a $23.5 million ASIC penalty.

Cbus Super has introduced new streamlined processes for paying death benefits, a reform intended to simplify the experience for grieving families by removing lengthy and complicated claim staking.

The change, which took effect on 1 December 2025, is expected to cut an estimated four to six weeks from the claims process.

The reforms follow the Federal Court ordering Cbus to pay a $23.5 million penalty after thousands of members and claimants experienced unreasonable delays arising from serious failures in handling insurance claims.

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Under the new rules, when a Cbus member has no nomination, the fund will apply a simplified death benefit order of payment.

If a death claim is notified and there is no death benefit nomination on the member’s account, benefits will now be paid to the surviving current spouse, including same-sex, married or de facto partners.

If there is no surviving spouse, the benefit will be distributed equally among surviving children and if there are no surviving spouses or children, the death benefit will be directed to the member’s estate.

Cbus Super CEO Kristian Fok said the reform marked the first in a series of steps aimed at simplifying death claim processes.

“We’re making things simpler for grieving families by stripping away much of the complexity,” Fok said.

“When there is no binding beneficiary nomination, death benefit payments will be made in a way that aligns with what people naturally expect – payment to a spouse, to children, or to an estate.”

“We want to give our members peace of mind about where their benefits will go while reducing the time it takes to process death benefit claims.”

Further reforms are planned for mid-2026, including removing the option to make a non-binding beneficiary nomination and eliminating the three-year renewal process for binding nominations. The fund will introduce digital non-lapsing binding beneficiary nominations.

Ahead of this next shift, Fok encouraged members to review their account settings. He urged those who have not made a binding nomination to do so to ensure their wishes are recorded.

The fund said the latest changes build on improvements made over the past 18 months to speed up existing claims processes.

“We have enhanced our oversight of claims, doubled the size of the claims teams, and trained specialist teams to handle death claims efficiently and compassionately,” Fok said.

Cbus also announced the launch of a new podcast, The Cbus Super Shift, which will cover estate planning and beneficiary reforms.

The 10-episode series aims to demystify super for members and provide straightforward guidance on managing super and accessing government entitlements with topics ranging from ‘What’s enough to live well?’, ‘How to track your super’ and ‘Balancing super and the Age Pension’.