Binding Death Benefit Nominations Explained

When it comes to superannuation, many people assume their retirement savings will automatically pass to their loved ones upon death. Unfortunately, that’s not always the case.

Unlike assets covered by your will, superannuation is treated separately. To ensure your super goes to the right people, you need a Binding Death Benefit Nomination (BDBN).

What is a binding death benefit nomination?

A Binding Death Benefit Nomination is a formal directive you give to your superannuation fund, specifying who should receive your superannuation benefits when you pass away. If the nomination is valid, your fund is legally required to follow your instructions. Without a binding nomination, the trustee has discretion over who receives your benefits.

The three-year expiry rule

Most industry and sector super funds require Binding Death Benefit Nominations to be renewed every three years. If your nomination expires, the trustee once again has the authority to decide who receives your super.

Non-lapsing binding nominations

Many private sector funds offer non-lapsing binding nominations that do not expire unless you change or revoke them. Not all funds offer this option, and rules can vary, so it’s important to confirm the details with your fund.

Binding nominations in Self-Managed Super Funds (SMSFs)

SMSFs operate under a trust deed, so rules differ from those of large super funds. Many SMSFs allow non-expiring nominations, custom rules (such as cascading nominations), and greater trustee control, which can create conflicts when nominations are unclear.

Who can you nominate?

Eligible beneficiaries include spouses (including de facto and same‑sex partners), children (including adopted or stepchildren), financial dependents, interdependents, and your legal personal representative (your estate).

How to make a valid binding nomination

To make a valid nomination: (1) Check your fund’s rules. (2) Complete the required form. (3) Nominate eligible beneficiaries. (4) Ensure allocations total 100%. (5) Sign with two adult independent witnesses. (6) Submit the form to your fund.

Final thoughts

A Binding Death Benefit Nomination ensures your superannuation is distributed according to your wishes. Keeping it up to date protects your loved ones and prevents potential disputes.