Cbus rolls out death benefit nomination changes

Cbus will roll out changes to death benefit nominations, which include scrapping nominations that expire in three years.

Effective October 16, Cbus will offer new non-lapsing binding death benefit nominations and allow members to make them online.

The super fund will no longer offer nominations which expire in three years, although it will follow up any nominations before they expire. Currently, binding death benefit nominations have to be renewed every three years.

Finally, it will no longer offer non-binding death benefit nominations and remove non-binding nominations listed on member accounts from this date.

Last October, Cbus agreed to pay $23.5 million to settle the matter brought against it by ASIC in relation to delayed death benefit payments to members. Some members were impacted by delays to death and TPD claims processing, having to wait more than 90 days.

ASIC alleged the number of impacted members was closer to 10,000 - more than 50% of all the claims Cbus was dealing with in late 2022 - and that some claimants were left waiting more than 12 months for a payout.

Cbus vowed to pay them faster. Where members have not nominated a beneficiary, Cbus said death benefit payments will be paid to the surviving current spouse.

If there is no surviving current spouse, surviving children will receive the benefit in equal shares, and in cases where there is neither a surviving current spouse and no surviving children, the benefit will be directed to the member's estate.

Cbus said this reform will eliminate the need to undertake lengthy and complicated "claim staking" in most cases - a process the fund uses to determine eligible beneficiaries. It will also reduce the death claim process by about four to six weeks.

In the 2025 financial year, Cbus dispensed $437.4 million in death benefits, according to APRA, making it the fourth-largest payout behind AustralianSuper ($1.1bn), Australian Retirement Trust ($764.3m) and Colonial First State First's Choice Superannuation Trust ($621.3m).