Reversionary Pensions and Death Benefit Nominations: Why Your Super Pension Needs Both

By Rod Genders | Genders and Partners | 21 September 2026

Many retirees drawing an account-based pension from their superannuation fund assume that a binding death benefit nomination is all that is needed to ensure their spouse or dependant continues to receive an income after they die. In fact, once a pension is already being paid, a separate and often more powerful mechanism – the reversionary beneficiary nomination – can determine what happens far more directly, and the two mechanisms can interact in ways that catch people out if not properly understood.

What Is a Reversionary Pension?

A reversionary pension is an account-based pension that has been set up, from the outset, to automatically continue being paid to a nominated reversionary beneficiary upon the death of the pension member – without any need for the fund’s trustee to exercise a discretion, and generally without needing to be commuted and restarted as a new pension. The nominated reversionary beneficiary must be a dependant for superannuation purposes at the time of death, most commonly a spouse, but potentially a child under eighteen, a person who was financially dependent on the deceased, or a person in an interdependency relationship.

Because the pension simply continues, rather than being paid out as a lump sum and then re-established, a reversionary pension can offer valuable continuity of income for a surviving spouse, and in some circumstances more favourable treatment of the tax-free and taxable components of the pension, along with continued access to any relevant transfer balance cap concessions. It is generally set up when the pension is first commenced, by nominating a reversionary beneficiary on the pension establishment documents – it is not the same document as a binding death benefit nomination made over the accumulation phase of a fund.

What Is a Binding Death Benefit Nomination?

A binding death benefit nomination is a separate direction, usually renewed every three years (or made non-lapsing if the fund’s trust deed allows), instructing the trustee how to pay out a death benefit – typically as a lump sum – to one or more dependants or to the deceased member’s legal personal representative. Unlike a reversionary nomination, a valid and current binding nomination compels the trustee to follow the member’s instructions, removing the trustee’s discretion, but it generally deals with a lump sum payment rather than the continuation of an existing pension.

Practical tip: a reversionary nomination and a binding death benefit nomination are not mutually exclusive – they often need to work together, particularly where a member has both a pension account and a separate accumulation account within the same fund.

Where the Two Can Conflict

Difficulties commonly arise in three scenarios. First, where a member has a reversionary pension already in place, but subsequently signs a binding death benefit nomination purporting to redirect the same pension account to someone else – the reversionary nomination, having taken effect at the time the pension commenced, will often take priority, and the later binding nomination may be ineffective for that account, creating confusion for grieving families and fund trustees alike.

Second, where a member has both a pension account (with a reversionary beneficiary nominated) and a separate accumulation account (governed by a binding nomination naming a different person) – each nomination should be considered and drafted with the other in mind, so that the overall outcome reflects the member’s actual wishes for the whole of their superannuation interest, not just one account viewed in isolation.

Third, where personal or family circumstances change – following a separation, a new relationship, or the death of a previously nominated reversionary beneficiary – and the paperwork is not updated. A reversionary nomination made many years ago in favour of a former spouse can remain technically valid unless it is properly revisited, particularly if the fund’s rules do not require it to be reconfirmed periodically in the way binding nominations often do.

Superannuation and Your Broader Estate Plan

It bears repeating that superannuation, including a reversionary pension, generally does not form part of your deceased estate and is not governed by your Will. The trustee of your superannuation fund, not your executor, ultimately controls how a death benefit is paid, subject to any valid binding nomination and the fund’s own trust deed. This makes it essential to review your superannuation nominations – both reversionary and binding – as a core part of any broader estate planning exercise, alongside your Will and Enduring Power of Attorney, rather than treating superannuation as an afterthought.

Practical Steps to Take

• Ask your fund whether your pension has a reversionary beneficiary nominated, and confirm who that person is.
• Check whether you also have a binding death benefit nomination on file, when it was made, and when (if ever) it lapses.
• Review both nominations together whenever your family circumstances change – marriage, separation, divorce, new children, or the death of a nominated beneficiary.
• Ask your fund and your adviser how the two mechanisms interact under that specific fund’s trust deed, as practice can vary between funds, particularly self-managed superannuation funds compared with large retail or industry funds.

Word to the wise: self-managed superannuation funds allow considerable flexibility to tailor both reversionary and binding nominations in the trust deed itself – but that same flexibility means poorly drafted or outdated deeds can produce unintended results if not reviewed by someone familiar with both superannuation law and estate planning.

Conclusion

Reversionary pensions and binding death benefit nominations serve related but distinct purposes, and a complete superannuation and estate plan needs both to be considered together, not in isolation. Reviewing your nominations periodically, and whenever your circumstances change, is one of the simplest and most valuable steps you can take to ensure your superannuation passes to the people you intend, in the way you intend.

Want to Find Out More?

If you would like further advice about reversionary pensions, binding death benefit nominations, or how your superannuation fits into your broader estate plan, contact our friendly team.

When it comes to Wills, Probate, Deceased Estates, asset protection and estate planning in Australia, you can trust the oldest law firm in South Australia – Genders & Partners – to guide you through the tough decisions you must make for your family’s future care and welfare.

If you have any questions or would like further information, or a quick phone call to discuss, book a timeslot for a free 15-minute phone consultation.

We can help you to protect yourself and your family. We look forward to being of service.

More Superannuation and Death Benefits Resources

• FAQs
• Videos – Superannuation and Estate Planning
• Articles about superannuation and death benefits
• Articles about testamentary trusts
• Our Adelaide lawyer blog

All these and many more superannuation and estate planning topics are available for discussion with the oldest law firm in South Australia. Visit our articles page to explore our complete library of estate planning resources.

DISCLAIMER: This article is intended as general information only and does not constitute legal, financial, or taxation advice. The treatment of reversionary pensions and death benefit nominations depends on the rules of the specific superannuation fund and each member’s individual circumstances. You should obtain specific advice from a qualified practitioner before taking or refraining from any action. Genders and Partners accepts no liability for reliance on this article without such advice.

This article was prepared 21 September 2026.

This article was last reviewed on 21 September 2026 and does not describe or capture any changes to the law after that date.