Caution urged on death benefits

26 August 2014
| By Mike |
image
image
expand image

Superannuation fund trustees have been cautioned against treating parents or guardians differently with respect to death benefit distributions to minor beneficiaries.

Superannuation Complaints Tribunal (SCT) chair, Jocelyn Furlan has used the tribunal's quarterly update to tell fund trustees that they will need to have sound reasons for excluding parents/guardians from such process.

"The Tribunal expects that trustees will have considered the circumstances of each minor beneficiary and have reasons for their decision that the parent/guardian is unsuitable to be the trustee of the benefit," she wrote.

Furlan said trustees needed to be careful about applying rules without regard to individual circumstances, especially if different rules were applied depending on whether the surviving parent/guardian was themselves dependent on the deceased member.

"In the Tribunal's view, there is unlikely to be a sound reason, relating to the ability to be a trustee of the benefit, for treating a surviving dependent parent/guardian differently from a surviving non-dependent parent/guardian, all other things being equal," she wrote.

"In the absence of evidence that the parent/guardian is unfit to care for the beneficiary's physical, mental and emotional wellbeing, significant independent evidence would be required to indicate that that person is unfit to care for the beneficiary's financial wellbeing."

"Where no concerns have been raised about the parent/guardian's capacity to care for the beneficiary generally, requiring him or her to seek approval and funds from a third party trustee of the benefit to provide for the minor beneficiary's needs is a significant impost, in an environment that has already been affected by a death that is usually premature and often unforeseen," Furlan wrote.

 

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

10 months 2 weeks ago
Kevin Gorman

Super director remuneration ...

10 months 3 weeks ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

10 months 3 weeks ago

The superannuation industry will be judged by its member services rather than how effectively it accumulates wealth, according to Stephen Jones....

12 hours ago

APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers....

13 hours ago

The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members. ...

3 days 11 hours ago