Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant PDS and TMD at rest.com.au/pds.

---------

Ange

Hi, I'm Ange, and this is my co-host, Andy. And look, until I started working in super, the idea of what happens to my super when I pass away, hadn't really entered the equation. Like I had thought about, you know, what happens to my apartment or what happens to my car. But at no point had I thought about what happens to my super and also the insurance in my super. And really, you know, when you think about like passing away, I just like to think about the epic party that everyone's going to have in my honour.

But now that I'm actually here, I'm like, oh, maybe we should talk about this because I'm probably not the only Australian that's gone, ‘I've never actually thought about what happens to even when you die.’

Andy

Yeah, I guess like super feels kind of intangible, right? Like it's this thing that's there. It's not like a house or car that you can see and you can touch and you can feel, but it is one of your biggest assets.

Ange

That’s a really good point.

Andy

So it makes sense to really think about this and make sure you're getting it right, getting it set up, because ultimately it will be for someone you love and you want those things to go to the people you love.

Ange

Well, on that note, answering this string of morbidly interesting questions is Sam from Rest. Welcome to the podcast, Sam.

Sam

Thanks, guys. Thanks for having me.

Ange

I just want to know, what would happen to my super when I pass?

Sam

Firstly, so sorry for your loss, you'll be sorely missed.

Ange

Thank you, thank you very much.

Sam

So with your superannuation, it doesn't automatically fall into your estate, like what your apartment or your car or, other assets will. So what will happen is when you pass away, either one of your family members or the ATO will let us know that you've passed away. And then that's when we will jump in, have a look whether you've got a beneficiary listed on your account. And then we pay according to that beneficiary.

Ange

Okay, so just to clarify that when you say the word beneficiary, do you mean like the person that gets your money when you pass away, or people maybe? Like what does that mean?

Sam

Yeah, absolutely. So it is the person or people. Or you can also nominate your estate to receive your…

Ange

Okay. Yeah.

Sam

Because there's laws around who you can actually nominate as a beneficiary, sometimes your closest loved ones don't actually fall into those categories. So that's when you're able to nominate your estate and then have a will sat in the background that will nominate those people for you.

Ange

Okay. That sounds like hard work.

Sam

It's no, it's actually not too bad. I've done it myself. So, I have nominated my estate. So if I was to pass away, Rest would have a look at my beneficiary nomination form. It would say my estate. And then I've also got a will set up which would say that I leave it to, half and half to my mom and my brother. Lucky them if they’re listening.

Ange

Gosh you’re organised.

Sam

Yeah, so that is just because I can't, I can't legally nominate my mum or my brother as my beneficiaries.

Ange

Yeah, got it. Okay. We’ll get to that, I’ve got a bit of a story for that, we will get to that a little bit later.

Andy

So is that, did you have to nominate your estate because super doesn't automatically form, like doesn't automatically just fall into that bucket. It's, something manually has to happen.

Sam

Yeah.

Andy

Right okay. Interesting. I've always thought that like it would just naturally like, there would be like some logical thing that would happen. But I guess if you don't nominate them, what are you going to do, like haunt Rest? Like how are you going to let them know, you're going to come back as a ghost?

Ange

Ooo!

Sam

Exactly, what do you actually want done with it?

Andy

Open the elevator door one time and yeah, like spooky. But that won't work. I guess. I'd imagine it would have to be like, yeah, you let them know before you go. Goes to your estate or it goes to a beneficiary.

What is that thing called? Does it have a technical name or something like ‘the payment’ or is it, is it just money? What do you, what do you call that?

Sam

So it's called your superannuation death benefit.

Andy

Right.

Sam

So what will get paid out, if you pass away, is your balance of your superannuation as well as, if you've got life insurance inside your super. So say you've got $100,000, for example, of life insurance inside your super that also gets paid. So whatever your balance is, plus that because you've passed away, the whole lump sum will go to whoever your beneficiary is.

Andy

Okay.

Ange

Lucky them! So what happens if no beneficiary has been nominated?

Sam

So if you don't have a beneficiary on your account whatsoever, Rest well then follow the laws that are in place and use their discretion based on your circumstances at the time of death. And then they will pay according to their discretion. So, that could potentially be as simple as paying it to your estate. But the money still will get paid out somewhere. It's just it takes a much longer for Rest to determine where to pay it.

Ange

Interesting. Well, I've got a story for you guys, a bit of a personal one. And I can tell you now, my husband's not going to be too happy that I'm sharing it, but I am going to do it anyway. So I got married about a year ago. A bit over a year. Pretty much the week that I got married, I went in and I updated my beneficiary on the Rest app to be my husband. And then I spoke to him about it about a year later, like it came up in conversation. And we spoke about it a few months ago, and I was like, oh, who have you got listed as your beneficiary on your super app? And I was so shook by the answer, he goes, oh, it's my mum. Like, not even his dad. His mum. And I was like, no, you can't have your mum as your beneficiary. He's like, why not?

Firstly, like, let's not even unpack that, because why not? I'm your wife. But beside that point, you’re not allowed, my understanding is you're not allowed to have your mum. So for the people listening at home who are like my husband and have their mums is their beneficiaries when they shouldn't. Can you tell us who you can and can't have as a beneficiary?

Sam

Absolutely. So, what it falls under is what's called a SIS Dependant. So a SIS dependant will be your spouse. It can also be a de facto partner as well. Your children, they automatically fall under a dependent under the SIS Act. And then the last one is, whether someone is in an interdependent relationship with you.

So it also falls with, things like, perhaps you're looking after an elderly parent. So things like that as well, will fall under the SIS act.

Ange

Okay, so under certain circumstances, Ross could have possibly put his mum down.

Sam

In this instance, I don't think so.

Andy

It's so much more … it's like the thing that's surprising me now is it's like, well, there's a lot to a dependent, you know what I mean? Like, it's a bit more complicated than what in the back of my mind, I thought it would be. And it's quite interesting. I get where Ross is coming from. I fall into the mumma's boy bucket. I'd be like, all right, let's just pop in mum. She's also my, you know, emergency contact and all that other stuff.

Ange

I should have predicted this.

Andy

Yeah, but, I can 100% get that she's no longer a dependent, right?

Sam

So in that instance, the nomination will be deemed invalid. But Rest still then can use their discretion as to who to pay the funds out to. So they could, potentially say, pay it into the estate. But it's just the with the binding nominations that, like I said, it supersedes your will. So whatever you have listed, it goes to them. And it's just really quick because we don't have to look into it. As long as that's valid. Rest doesn't have to look into it. And the money just gets paid and it can get paid within a matter of days in that instance.

Ange

So it's a faster process. Doesn't take as long.

Sam

Yeah

Ange

So, like my husband, who now I hope has given some great thought into who he could nominate as his beneficiary. How easy is it to nominate a beneficiary, and what's the process?

Sam

So with a non-binding nomination, it is super easy. It is as easy as jumping into the Rest app, and filling in the details and setting it up, hitting enter. And it's good to go. It's a little bit more difficult with the, binding nomination, just because it's quite an important legal document as I mentioned. So with that one, we do need a signed form that also has to be signed by two witnesses as well.

Ange

Okay. You know what though, actually might be really helpful if we get Phil to show us exactly how to nominate a beneficiary in the rest app. Phil, over to you.

Phil (V/O)

Thanks Ange. So I'm going to show you how to nominate a non-binding beneficiary in less than a minute. Grab your phone and open up your Rest app. Now tap menu and beneficiaries. Seems easy enough. Select non-binding beneficiary. Type in their details, then tap done. Make sure you consider your situation, and who in your life you can validly nominate before going through the process. Simple. Back to you, Ange.

Ange

That was awesome. Thanks, Phil.

Andy

So, Sam, you mentioned just briefly there, binding and non-binding beneficiaries. In my mind, it sort of seems like at the moment one's trickier than the other one. Can you just explain to me the difference between the two?

Sam

So binding beneficiaries are a bit more official. So what we do need is a form signed, as well as signed by two witnesses. So it's a legally binding document. So that's why it's a bit more complex, getting that one through. So the nomination form will walk you through how to fill it out. It's pretty straightforward. It'll go through things like who's eligible to be a witness on the form. But if you do find that it's a little bit tricky. We've got financial advisers that can help talk you through it.

Ange

Beautiful, that doesn’t sound too bad.

Andy

So those financial adviser are there for our members, right?

Sam

Correct.

Andy

Rest members? Yeah. Okay. Cool. Why would you want to choose a non binding beneficiary, if it's not actually legally binding?

Sam

So with you non-binding beneficiaries, Rest will still take into consideration what you've listed there. It's way, way quicker to do like we saw with Phil before. It can take like two minutes to pop in your details. So it's just much easier and quicker, to do the nomination. But then with your binding nominations, there is a bit more involved in getting those in, with the form and your witnesses. But once that in, once that's in, that's legally binding and that's where Rest is going to pay the money to.

So if you want that peace of mind that if you were to pass away, it's going exactly where you want it to, no discretion involved. Then that's where you would look at a binding nomination. Keeping in mind, though, that they do lapse every three years. So you've got to keep on top of it.

Ange

Got it. And when I was doing it myself, I noticed that, when you are doing a non-binding, because I haven't done a binding personally, although I probably should after this chat, with my non-binding, it asked me to round it up two whole numbers. So if you have an odd number of people, does that mean that you have to get selective about who's going to get more than the other?

Sam

Your favourite will be noted on that piece of paper. (laughing) So like if you've got three kids, someone's getting 34%.

Ange

Ooh, okay.

Andy

I'm getting the 34%. Well it's..

Ange

Are you one of three, Andy?

Andy

No I’m one of four. Yeah. So probably 25… Yeah.

Ange

Even numbers, easier to manage, odd numbers, not so easy. Okay, that could get tricky.

Andy

No, one of my sisters getting written out. (laughing) No, that's not happening. Yeah, yeah, yeah, they're all on it. I love you all. I'm sorry. Yeah.

Ange

Are there any other types of beneficiaries that we should be aware of? We've touched on binding. We've touched on non-binding. Is there any others?

Sam

So with our pension accounts there is a nomination called reversionary beneficiary. So what that does is, if you're receiving your pension payments as a monthly payment, you can nominate someone, your spouse, for example, to receive the payment as a monthly payment rather than the lump sum, if you choose to do so.

Ange

Okay, so they receive it like a pension.

Sam

Absolutely.

Andy

Sure, keeps that income coming in.

Ange

Yeah. Great.

So we went out and spoke to everyday Aussies about whether they've nominated their beneficiaries.

----

Sinem

Do you know what a beneficiary is, have you ever heard that word?

Person 1

No, I have not.

Person 2

I know the term, but in this context… no

Person 3

Yes

Person 4

Is that the person receiving the money, yeah?

Person 5

Uh.. I don’t

Sinem

So if you could pick anyone to be your beneficiary of your super, who would it be?

Person 4

My mum

Sinem

Your mum? Aww

Person 6

My family

Person 5

My fiancée.

Person 2

Probably my sister.

Person 3

My spouse.

Sinem

Your spouse?

Person 3

Yeah

Person 7

Well, my beneficiary is my wife

Person 1

Pick my mum.

Sinem

Your mum? Why?

Person 1

Oh, because she's done heaps for me,

Sinem

Cos she's your mum?

Person 1

So you know, give it to her, give back.

-----

Ange

Okay, so we've covered a lot of ground today. We have learned about what happens to super when you pass away. We've learned about the different types of beneficiaries and how to nominate them. In fact, we’ll be sure to pop some of the links in the show notes below, especially on how to nominate a beneficiary.

But before we go, there's just one more thing I think I have to do.

(ringing husband)

He's going to hate me so much for this.

Ross (on phone)

Hey, babe.

Ange

Hey, honey. How are you?

Ross

Good. How are you?

Ange

I'm alright. I've just got a quick question for you. You know how we were talking earlier on this year about your mum being nominated as your beneficiary? I was just wondering, have you actually updated that or is your mum still your beneficiary?

Ross

I think you're on it now.

Ange

Aww, good answer babe!

I will talk to you a little bit later, alright?

Ross

I'll see you later, bye.

Ange

Bye.

To be honest, I was actually kind of hoping that he would say his mum, just because I thought it would make for really good content. And I’m actually disappointed.

Andy

You nailed it, Ross.

Sam

We love an organized king.

Andy

Absolutely smashing it.

Ange

So he's a good husband after all.

Andy

Yeah, yeah. I better get onto mine before my wedding.

Ange

Make sure you do.

Andy

Thanks so much for listening. Make sure you like and subscribe and leave any comments that you'd like to, if you'd like to learn anything else about super. We've learned so much today and I feel I've had a really great time. Thank you, thank you and thank you.

Ange

And that's…

Andy & Ange

Super simple