Industry funds urge digitising death benefit nominations
In the wake of a number of industry superannuation funds being the subject of criticism and penalties for death benefit processing delays, their major representatives group has called on the Government to legislate to digitise binding death benefit nominations.
The SMC’s calls to Treasury have come against the background of the Australian Securities and Investments Commission (ASIC) heavily criticising funds over the handling of death benefits and actually launching legal action against AustralianSuper.
The Super Members Council has used a submission to Treasury to call for urgent legislative reforms to speed up the death benefits process, noting that binding death nominations are a key part of the process.
The SMC said that binding death nominations represent the means which enables super fund trustees to “fast track the payment”.
“But – in 2025 – current legal requirements require binding nominations to be made with a hard copy form and wet ink signatures,” it noted.
“The Australian Government should urgently change the SIS Act to enable binding death nominations to be made digitally. This would vastly speed payment times and cut out time-consuming processes with multiple people seeking to claim someone’s super.”
Elsewhere in its response to Treasury, the SMC also called for the recognition of First Nations kinship relationships in superannuation law, the implementation of a national digital verification system integrating state-based identity cards and the standardisation of cause of death information across jurisdictions.
The SMC said it welcomed the Treasury developing mandatory service standards in superannuation and said it “urged the Australian Government to fast track this work in the interests of millions of everyday Australians and finalise it swiftly”.
“Over the past year, a large service uplift effort has been underway. Profit-to-member super funds have made major investments to improve service and reduce complaints. This includes increasing dedicated resources, updating systems, streamlining processes, adopting new regulatory guidance, and in some cases moving previously outsourced customer service tasks in-house. In a clear sign of progress, AFCA’s preliminary complaints data for 2024/25 indicates a 38% drop in complaints related to delays in processing claims for insured benefits. This trend is very welcome – but there is more to do,” the SMC said.
“Building on this momentum, the mandatory service standards will drive further uplift in member service and communication, accelerate efforts to improve processes and timeframes, and strengthen public trust and confidence in the super system by setting a common framework that funds can develop to suit their diverse memberships and approaches,” it said.
“SMC wants to see the mandatory service standards finalised and implemented swiftly, to build on the strong uplift in member service over recent years. We offer our every assistance to the Treasury to advance this work on an ambitious timeframe.”
But I’m expected to be an expert on ‘elder abuse’, keeping in mind that super does not form a part of the Estate.
As an adviser, I generally have quite a lot of control and oversight of the BDBN. Will this put me on the hook when some greedy kid changes a BDBN on their Mum’s phone 3 years before they die?
Interestingly, I deal with a bunch of funds and platforms, notably platforms…..
And interestingly these Trustees seem to manage the wet signature stuff when it comes to this rather well.
I’m not interested in someone with hundred’s of thousands of members trying to cut corners because they aren’t interested spending the time and effort required to do things that other Trustee’s can.
If this gets up, it’s a complete cop out.