Non-lapsing vs binding vs reversionary

A standard BDBN under Reg 6.17A. Binds the trustee if valid; lapses after 3 years. Every APRA-regulated fund offers this. Requires two adult witnesses (neither a nominated beneficiary) signing in your presence.

Same binding effect, but does not expire. Only available where the fund's trust deed expressly permits it. Most large industry and retail funds now offer non-lapsing BDBNs (AustralianSuper, ART, HESTA, Aware, UniSuper, Hostplus and others), but the form, witnessing requirements and revocation rules are set by each fund — not by the regulations.

If your circumstances are stable (long marriage, adult children, no expected changes), non-lapsing is usually the better pick. Update it when reality changes, not on a timer.

A different mechanism entirely. If you're already drawing an account-based pension, you can nominate a beneficiary to whom the pension automatically reverts on your death. The pension keeps paying, uninterrupted, to that person.

Reversionary nominations are usually made to a spouse. They have transfer balance cap consequences (the reverting pension counts toward the beneficiary's cap 12 months after death) that are worth planning around with an adviser.

A wish. The trustee "takes it into account" but is free to pay the benefit to any eligible dependant. If certainty matters — and for most people, it does — use one of the binding options above instead.

• Simple, stable family, no SMSF: non-lapsing binding to your spouse, or a lapsing BDBN with a calendar reminder.
• Already drawing a pension and want it to continue: reversionary pension to your spouse.
• Blended family, or beneficiary outside SIS categories: BDBN to your legal personal representative + a well-drafted will (see the blended families guide).
• SMSF: read the trust deed first — the deed can override or restrict any of the above.