• a provision stipulating that although a member may request a pension, it is the trustee who resolves in its discretion to commence the pension and to decide the terms.
Accordingly, the deeds typically oust the prohibition on fettering in respect of BDBNs. However, they fail to oust the prohibition in respect of auto-reversionary pensions. Therefore, there are serious questions as to whether most auto-reversionary pensions would bind the trustee. A validly executed BDBN, however, is typically far more likely to actually bind the trustee.
Accordingly, the BDBN would typically win in the event of conflict (subject to the fund’s specific governing rules of course).
Practical action for advisers
Again, there is no case on point, so the above is somewhat conjecture. Accordingly, some uncertainty remains.
But the good news is this. With proper planning, members don’t have to face any uncertainty. They can avoid uncertainty by ensuring that their BDBN and their pension documentation are consistent.
Accordingly, it is good practice for advisers to periodically double-check that the two do “speak with each other” and take corrective action if they don’t.
Bryce Figot is a senior associate with DBA Lawyers. He can be contacted on bfigot@dbalawyers.com.au
