Superannuation funds have vowed to improve their services in the wake of damning criticism from Australia's corporate regulator about their treatment of members.
Their peak industry bodies acknowledged a report about death benefit claims handling practices in the A$4.1 trillion (US$2.6 trillion) sector issued on Monday by the Australian Securities and Investments Commission (ASIC).
The report highlighted some of the worst examples of poor treatment of members, such as taking more than 500 days to pay a $100,000 death benefit to a First Nations woman who grieved the loss of her husband.
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 poor industry practices could have on grieving Australians.
ASIC 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.
The Association of Superannuation Funds of Australia (ASFA) said the report was a significant step in delivering better outcomes for members and their families.
“The superannuation sector knows we have let down some of our members and their families at a time when they needed us, and we are sorry,” ASFA CEO Mary Delahunty said in a media release.
Super Members Council CEO Misha Schubert said it acknowledged the ASIC report with "deep empathy”.
“Super fund members and their families rightly expect and deserve the highest standards of service, care and compassion – especially in the hardest of times,” Schubert said in a media release.
But fund members advocate Super Consumers Australia said the report showed super funds failed in their basic responsibilities to members and their families.
“This report confirms what we’ve been hearing from families in crisis: super funds are blind to their own failures, with no targets, no monitoring, and no accountability,” Consumers Australia CEO Xavier O’Halloran said in a media release.
“It’s shocking that no fund has set a target for how long it should take to process a death benefit claim. As a result we’ve seen people subject to years of delay. These are people who’ve just lost a loved one — and they’re forced into a bureaucratic maze with no end in sight.”
