An Australian superannuation fund trustee took more than 500 days to pay a $100,000 death benefit to a First Nations woman who was grieving the loss of her husband, according to Australia’s corporate regulator.
This was one of the distressing complaints made about death benefit claims handling practices in the A$4.2 trillion (US$2.67 trillion) super industry, the Australian Securities and Investments Commission (ASIC) said on Monday.
ASIC made 34 recommendations in its Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve, which it said revealed the devastating impacts that poor industry practices could have on grieving Australians.
ASIC did not reveal the super fund trustee which took 500 days to make the payment but its review covered 10 funds in the two years ending 31 March 2024:
- Australian Retirement Trust
- Avanteos (Colonial First State)
- Brighter Super
- Commonwealth Superannuation Corporation
- HESTA
- Hostplus
- NM Super (AMP)
- Nulis (MLC)
- Rest, and
- UniSuper
“Many of the complaints we read were distressing. We saw deep grief, vulnerability, frustration and genuine suffering,” ASIC Commissioner Simone Constant said a media release.
Chair Joe Longo said the report identified issues including excessive delays, poor customer service and ineffective claims handling procedures, and called on industry leaders to take ownership of the problems and flex their muscle to fix the failings.
“At the heart of this issue is leadership that doesn’t have a grip on the fund’s data, systems and processes – and ultimately it is the customers who suffer for it,” Longo said.
“This kind of disconnect is unacceptable in any area of corporate Australia, but in the superannuation sector it is particularly serious, because super affects everyone from the boardroom to the living room.”
Constant said the actions for trustees covered a range of focus areas including:
- better customer service and faster response times
- improved monitoring and reporting on claims handling timeframes
- streamlined processes and procedures
- better guidance and training for staff
- removing barriers for First Nations members and claimants, and
- clearer communications and more support for members.
The review into the death benefit claims handling practices of 10 trustees revealed:
- many examples of excessive delays and poor service
- gaps in trustee data and reporting
- some trustees’ processes and procedures were unclear and inconsistent
- communication and engagement were often ineffective and insensitive, and
- inadequate support for First Nations claimants and claimants experiencing vulnerability.
