ASFA urges three-year trial of revamped SCT

The Association of Superannuation Funds of Australia (ASFA) has mounted a strong defence of the Superannuation Complaints Tribunal (SCT) warning the Government it should not lightly abandon the Tribunal model.

In what represents a determined counter-punch to the recommendations of the an interim report recommending abandonment of the SCT and the imposition of an ombudsman model, ASFA has used a submission to Treasury to argue an appropriate case has not been made for such change and the industry is deeply concerned about the consequences.

The submission said there was significant concern on the part of ASFA and its members about the "lack of weight placed on the clear disadvantages for consumers if the statutory tribunal model is abandoned".

Related News:

"In this respect, it should be clearly understood that the primary concern of the superannuation industry is not with retention of the SCT for its own sake, but with preserving the many consumer protections and safeguards that are inherent in the tribunal model and stand to be lost in a move to an industry ombudsman scheme," the submission said.

It said that while ASFA accepted many of the review panel's draft findings regarding issues with the SCT's current performance, it did not consider that an "incontrovertible case has been made that the ‘dispute resolution mechanisms for superannuation are broken'."

"Further, while the interim report asserts that the SCT model ‘will not withstand future pressures', this appears to be based on an assumption of no change to the existing model, when even the most vocal supporters of the SCT — and indeed the SCT itself — have called for improvements to the model," the ASFA submission said.

It said that in proposing the replacement of the SCT with the Superannuation Ombudsman — a step which would involve significant cost and disruption for the industry, and, therefore consumers — insufficient consideration appeared to have been given to effecting meaningful change within the tribunal model.

The submission said that rather than proceeding straight to the conclusion that the SCT should be replaced with a Superannuation Ombudsman, ASFA recommended that further consideration be given to specific improvements to the Tribunal's current operating structure and a substantial boost to its funding and resourcing.

"The revamped SCT should then be tasked with delivering a set of agreed outcomes and performance improvements within a ‘grace period' of not less than three full financial years, timed from full implementation of the changes and receipt of the additional funding," the submission said arguing that a shorter period would, in ASFA's view, be inappropriate and unrealistic.

It said that at the conclusion of the grace period, the SCT's performance should be independently reviewed against its agreed outcomes by the Australian National Audit Office and, if adequate progress had not been made, a transition to an industry ombudsman scheme could be considered at that time.




Related Content

Insurance code needs teeth

Kim Shaw writes that in reforming the process on opt-out default life insurance, Financial Services Minister Kelly O’Dwyer has taken a practica...more

The regulators are stirring

Adam Gee writes that it seems clear that superannuation funds are now entering a new era of regulatory oversight.On 30 June, the Australian Securities...more

Valid approach to insurance in super

Specialist lawyer, John Berrill begs to differ with critics of the Insurance in Superannuation Working Group process, arguing it has the capacity to d...more

Author

Comments

Add new comment