Understanding Beneficiary Nominations

You may want to consider changing any nomination you have made for your super in the event of your death, now that new super rules apply.

New rules
From 1 July 2017, there is a limit on how much super you can transfer to ‘retirement phase’ during your lifetime, where no tax will be payable on investment earnings.
This limit is known as the ‘transfer balance cap’ and it’s $1.6 million in 2017/18. It is indexed in $100,000 increments in line with the Consumer Price Index, and it includes pensions started with your own super money, as well as those you may continue or commence as a result of someone else’s death.

Consider your death benefit options
The introduction of the transfer balance cap may warrant reviewing the death benefit nomination you have put in place for your super. This could involve:

  • Changing the people you have nominated (or the amount they would receive) in a binding death benefit nomination to manage the impact the distribution of your super could have on your beneficiary(s) transfer balance cap(s). This could be considered if your super is held in a pension or the accumulation phase.
  • Switching to a non-binding nomination. This option is also available if you are in pension or accumulation phase and could be suitable if it’s desirable to have flexibility at the time of death to determine how much of your super is paid to different beneficiaries and the form in which the benefit is paid (ie lump sum or pension).

Ask your adviser
AGS Financial Group can help you decide on the strategies that work best for you – so get in touch with us and make an appointment to discuss your needs and situation.
 


Published : 25 Oct 2017