UPDATED: One of Australia’s largest superannuation funds has declined to comment to a parliamentary committee about whether members will have to pay fines imposed for delaying the processing of insurance payouts to vulnerable members.
Construction and Building Unions Superannuation Fund (Cbus) CEO Officer Kristian Fok was appearing before the Senate Economics References Committee inquiry into improving consumer experiences, choice, and outcomes in Australia’s retirement system.
Cbus has been accused by corporate regulator the Australian Securities and Investments Commission (ASIC) of costing members $20 million by delaying payments of life and other insurance.
ASIC has launched legal action in the Federal Court against Cbus’ trustee United Super Pty Ltd for allegedly failing to act efficiently, honestly and fairly in handling death benefits and total and permanent disability insurance claims between September 2022 and November 2024.
Committee Chair Senator Andrew Bragg asked Fok if Cbus, the owners of the trustee company or the members of the fund would pay any regulatory fine imposed on Cbus.
ASIC is seeking penalties, declarations, adverse publicity orders and orders for compliance matters to be implemented.
Fok said: “I'm not going to speculate on that. As you know, speculation on that before we've even had the ability to look at the full detailed information, I don't think is going to be helpful.”
He said since being appointed CEO last year he had initiated significant changes to leadership and organisational capabilities to address the need to improve outcomes for members.
“Whilst we have been far from perfect, our board and our team did take action to help reduce delays, and many of those actions have resulted in marked improvements in service and outcomes,” Fok told the committee hearing.
“I'm constrained in the detail of many of those actions that we've taken today, because they are subject to the ASIC litigation, but I might be able to give some examples.”
More than 6,000, or about 80% claims that were subject to the litigation, had been resolved with members and their beneficiaries receiving $755 million in benefits, and Cbus generally paid out 95-97% of claims, higher than the industry average.
The hearing was continuing at 12.10pm (AEDT).