How to nominate a beneficiary
for your super or pension

Under current super and pension rules, a beneficiary can only be a dependant or personal legal representative – the person appointed as executor or administrator of your estate – or some combination of these.¹

A dependant may include:

• your spouse (including a de facto spouse)
• your children (regardless of age)
• someone financially dependent on you (fully or partially)
• someone you had an interdependent relationship with. 

For a relationship to be considered ‘interdependent’, you and the other person must have a close personal relationship and generally live together. One or both of you must also provide financial support to the other, and one or both must provide domestic support and personal care to the other.²

Provided the rules of your fund allow, any of these people can be nominated as beneficiaries.

If you want to give some or all of your super to someone else (not listed above), you can nominate your legal personal representative (estate) to receive it. Your super will then be distributed in accordance with your will. It is important to ensure your will has been updated to include your super if you choose this option.

Your super or pension fund may allow your beneficiary to receive your super as a lump sum, income stream (regular payments), or a combination.

There are, however, limits to who can receive an income stream – this option is only available to children under 18 (or under 25 if they’re still financially dependent). Even then, these income streams must be converted into a lump sum on or before your child’s 25^th birthday, unless they have a permanent disability. 

There are four main types of benefit nominations that people may choose from, based on their goals and whether they have a super or pension account. 

• binding death benefit nomination (for super or pension accounts)
• non-lapsing death benefit nomination (for super or pension accounts)
• non-binding death benefit nomination (for super or pension accounts)
• reversionary death benefit nomination (for pension accounts only)

CFS only offers non-lapsing death benefit nominations, and reversionary death benefit nominations for pension accounts. 

Binding and non-lapsing death benefit nominations legally commit the trustee of your super fund to pay your super to your nominated beneficiaries, provided the nomination is valid at the time of your passing. This means your super fund must pay your super to the beneficiaries you nominated.

A binding death benefit nomination generally needs to be renewed periodically (usually every three years) to remain valid.

A non-lapsing death benefit nomination may remain valid indefinitely unless you choose revoke it and make a new one. 

A reversionary beneficiary automatically becomes entitled to receive your super pension your death. With a reversionary pension, your existing super pension will continue to be paid, but to your beneficiary.

A non-binding death benefit nomination functions almost like a suggestion rather than instructions. Your super fund trustee will consider your nomination alongside the governing rules and super laws when determining who should receive your super.

This can be useful if you think your personal circumstances could change over time – for example, maybe you’re expecting your family to grow in the next few years, or are going through a separation. 

If you don’t make a benefit nomination, or your nomination is invalid, your fund’s governing rules will determine who receives your super. This may include:

• Paying it to your legal personal representative (estate), or
• Paying it to the eligible beneficiaries as your fund considers appropriate.

Depending on who your super is paid to – and how they receive the money – there may be taxes involved. 

For lump sums, tax will depend on whether it is received by a tax-dependant. This is different to a super dependant and includes:

• your spouse (including a de facto spouse) or former spouse
• your children aged under 18
• someone fully financially dependent on you
• someone you had an interdependent relationship with. 

If a tax-dependant receives your super as a lump sum, it’s tax free. In this case, your beneficiary doesn’t need to include it in their income tax return. However, a non-tax dependant may be required to pay tax on part or all of the lump sum they receive.

If a lump sum is paid to your estate, the tax will depend on whether it will be directed to tax dependants or non-tax dependants via your estate.³

For super paid to your beneficiary as an income stream, tax will depend on a range of factors, including the age of both you and the recipient and the taxable and tax-free components of your super account. In most cases, if either you or your beneficiary are aged 60 or over, the income stream payments will be tax free.

That doesn’t mean paying a lump sum to your dependants is always the smartest option. You should consider speaking with a financial adviser if you’re unsure on the most tax-effective way to pass on your super or just want to know more about how these taxes work.

A binding or non-lapsing death benefit nomination can provide more certainty than other nomination options. In most cases, where a binding or non-lapsing nomination remains valid at the time of death, it cannot be challenged via the super fund, the Australian Financial Complaints Authority (AFCA), or the Courts.

However, your nomination could be challenged on the grounds it is invalid at the time of death. For example, if there is insufficient evidence to prove the nominated beneficiary is a super dependant or the trustee cannot identify there is an estate.

It is also important to note that notional estate laws (currently only applicable in NSW) may in some cases allow a Court to make family provision orders out of assets that do not form part of a person’s estate – this can include super paid to an individual via a binding or non-lapsing death nomination.  

If you’d like to make a non-lapsing death benefit nomination for your CFS super and/or pension accounts, you will need to complete a Non-lapsing Death Benefit Nomination Form.

Please read the instructions carefully before filling out your details. Once completed, print the form and have it signed and dated in front of two eligible witnesses.

Your witnesses will also need to sign and date the form. You must then return the form to us.

You can:

Upload the form online 

Upload a scanned copy of the completed document by logging into our secure online portal under My Account > Upload a scanned form.

Post the form to us

Colonial First State

Reply Paid 27

Sydney NSW 2001

We’ll process your completed form within five working days of receiving it. If the form is incomplete, or we need to ask you for more information, a member of our team will be in touch.

To nominate a beneficiary to receive your pension payments if you pass away, complete a Reversionary beneficiary form. 

Please read the instructions carefully before filling out your details. Once completed, print, sign and date the form. You must then return the form to us.

You can:

Upload the form online 

Upload a scanned copy of the completed document by logging into our secure online portal under My Account > Upload a scanned form.

Post the form to us

Colonial First State

Reply Paid 27

Sydney NSW 2001

We’ll process your completed form within five working days of receiving it. If the form is incomplete, or we need to ask you for more information, a member of our team will be in touch. 

^{1Australian Taxation Office, ‘Paying superannuation death benefits’ N.D., accessed 26 September 2023}

^{2Australian Taxation Office, ‘Superannuation death benefits’, N.D., accessed 26 September 2023}

^{3Australian Taxation Office, ‘Death of a member’, N.D., accessed 26 September 2023}