Binding Death Benefits as an alternative to Reversionary Pensions?
The Draft Ruling expressly dealt with the position where the member had a binding death benefit nomination which required the benefit to be paid as a pension. The Draft Ruling provided (presumably on the basis that the member was in pension phase at the date of death) that the pension would not cease by reason of the death of the member, but transfer to the nominated beneficiary. This would apply if the nominated beneficiary required the benefit to be paid as a pension.
The final Ruling does not expressly refer to binding death benefit nominations. However, if the member was in pension phase at the date of death and the binding death benefit nomination provided that the death benefit must be paid as a pension and, in fact, the pension can be paid (because the nominated person is the spouse of the member and not an independent adult child of the member) then the Ruling provides that the pension has been transferred to the nominated person and it is a continuation of the pension which was previously payable to the member.
Back | Enquiry |