AFCA transition will hit super funds hardest

Superannuation funds are facing greater complexity than most other parts of the financial services industry and should be granted more time to adapt to the Australian Financial Complaints Authority (AFCA) regime, according to the Association of Superannuation Funds of Australia (ASFA).

In a submission filed with the Australian Securities and Investments Commission (ASIC), ASFA has claimed the transition to AFCA is significantly more complex for the APRA-regulated superannuation sector than other financial products.

It said this was because the Superannuation Complaints Tribunal (SCT) would continue to operate alongside AFCA for a period (as yet unspecified),” it said.

“Many key details remain uncertain at this point in time, including matters as fundamental as the precise start date and contact details for AFCA, the date on which the SCT will cease to accept new complaints, and the scope of AFCA’s jurisdiction,” the submission said.

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It said much of this information would not be confirmed until AFCA had been formally established and its Terms of Reference (ToR) had been settled.

“We appreciate that the settling of the AFCA start date and the ToR are not within ASIC’s control. However, some of the outstanding information will need to be included in updates to funds’ prescribed disclosure documents, and some will need to be reflected in other communication materials,” the submission said. “Accordingly, it must be acknowledged that continuing uncertainty over these details is impeding trustees’ efforts to prepare for the commencement of AFCA.”

The ASFA submission is urging transitional relief through to 30 June, next year.