Superannuation fund trustees have been warned that they cannot abrogate their responsibilities to the family lawyers of deceased superannuation fund members when it comes to determining death benefits distributions in the absence of a binding death benefit nomination.
The chairman of the Superannuation Complaints Tribunal, Graham McDonald has used the Tribunal’s latest quarterly bulletin to stress that the appropriate distribution of superannuation death benefits can be complicated and trustees cannot afford to neglect their responsibilities.
“While there are no easy answers, it is not acceptable for trustees to abrogate their decision-making responsibility and nominate the legal personal representative of the deceased and allow the benefit to be distributed according to the terms of the deceased’s will,” he said.
McDonald said that this was especially inappropriate in circumstances where such action had the effect of depriving the tax benefits available to beneficiaries.
“Trustees must face the decision and answer the question as best they can on the known information collection,” he said. “There will, or course, be widely differing views and there is no necessarily correct answer,” he said. “To add to the difficulty faced by trustees, the public, generally, fails to see a distinction between the distribution of assets in an estate from the distribution of a superannuation benefit.”
The SCT’s quarterly data revealed that complaints relating to death benefits represented the highest number of complaints received, representing 25.4 per cent, followed by disability benefits (24.7 per cent) and administration (18.4 per cent).
