The Nomination That Keeps the Payments Running
A reversionary nomination attaches to an account-based pension and directs that, on the member's death, the pension continues to a nominated reversionary beneficiary rather than stopping. The payments continue without interruption, the trustee has no discretion about it, and the survivor's transfer balance account is not credited until twelve months after the death.
- The answer: A reversionary nomination continues the pension to the nominated beneficiary — in practice a spouse — with no trustee decision and no interruption to payments.
- The trap: It applies to that pension account only. A separate binding death benefit nomination governs any other super, and the two can conflict.
- The recommendation: Use it where a spouse should simply keep receiving the income, and check that it and any binding nomination say the same thing.
Where the AI summary above gets this wrong
"A reversionary pension means your spouse inherits your super tax-free."
That's surface-true. Here's what it misses:
- It governs one pension account, not your super generally — Other accounts, and any accumulation balance, are directed by a binding death benefit nomination or by the trustee. The two documents can and do conflict.
- The twelve-month deferral is the practical benefit — The survivor's transfer balance account is credited at the date-of-death value twelve months later, which is the window in which they can make room in their own cap.
01 What the nomination does
A reversionary nomination is made on the pension account, usually at commencement, naming a beneficiary who must be a dependant under superannuation law — in practice almost always a spouse.
On the member's death the pension does not stop and is not paid as a death benefit. It continues, with the same payments, to the reversionary beneficiary, who becomes the recipient of an income stream that was already running.
The trustee has no discretion. That is the main structural difference from a binding death benefit nomination, which directs a payment the trustee then makes; a reversion is a continuation rather than a payment.
02 The twelve-month deferral
The reversionary beneficiary's transfer balance account is credited with the value of the pension at the date of death, credited twelve months after that date rather than immediately.
That deferral is deliberate: it gives a grieving spouse time to arrange their affairs, and specifically time to commute part of their own pension to create cap space before the credit lands. The consequences of not having room are in the excess transfer balance reference.
Because the credit is the date-of-death value rather than the value twelve months later, growth in the intervening year does not increase it. Drawdowns during that year do not reduce it either.
Shows: how much of a reversionary pension fits within the survivor's transfer balance cap when the credit arises, and what commuting some of their own pension during the twelve-month window would free up. Ignores: proportional indexation of the survivor's personal cap, growth in either pension, and the tax on any amount that has to leave super.
Source: ATO — Transfer balance cap
03 Where it conflicts with other documents
A reversionary nomination governs one pension. A binding death benefit nomination governs the member's super benefits generally, including any accumulation account, and where both exist they can point in different directions.
Fund rules vary on which prevails, and some deeds are explicit while others are not. The practical answer is to make sure they agree rather than relying on a hierarchy you would have to litigate to establish.
The decision itself — whether a spouse takes the benefit as an income stream at all — is separate and is worked through in the pension or lump sum post.
The uninterrupted payments are worth more than they sound. A surviving spouse dealing with a death does not need to also be dealing with a fund, a claim form and a gap in income. The reversion means the money keeps arriving on the same day of the month, and the transfer balance question can be dealt with in month six rather than week one.
FAQ
What is a reversionary pension and should I nominate my spouse as the reversionary beneficiary?
It continues an account-based pension to a nominated dependant on your death, with no trustee discretion and no interruption to payments. It suits a household where a spouse should simply keep receiving the income.
How does a reversionary pension nomination interact with my spouse's transfer balance cap?
Their transfer balance account is credited with the date-of-death value of the pension, twelve months after the death. Growth or drawdowns during that year do not change the credited amount.
Does a reversionary nomination override my binding death benefit nomination?
It governs that pension account only; a binding nomination governs super benefits generally. Fund rules vary on which prevails, so the practical answer is to make the two documents agree.
Sources
Regulator references
- ATO — Death benefit payments from super · Australian Taxation Office · 2026Death benefit payments from super: who is a dependant, and how the benefit is taxed.Last verified: 2026-09-07
- ATO — Transfer balance cap · Australian Taxation Office · 2026The cap that applies when a retirement phase income stream starts.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.