ASIC prioritises complaint delays by super funds

2 November 2023
| By Laura Dew |
image
image
expand image

ASIC has stated delays in super complaints of up to two years are a high priority for them.

Last month, Super Review wrote how complaints to the Australian Financial Complaints Authority (AFCA) relating to super funds, in particular delays about complaints handling, were on the rise. 

In its FY22–23 annual report, the organisation said there were 6,957 complaints about superannuation compared to 5,286 in the previous year. 

The number of complaints related to delays in claim handling rose by 135 per cent, from 737 last year to 1,738 and AFCA said this related to delays in handling insured benefit claims.

“Many superannuation complaints to AFCA can be traced back to issues with service quality, including the clarity and effectiveness of internal dispute resolution processes and the responsiveness of the trustees when questions are raised,” it said.

“While these complaints mainly related to total and permanent disability and income protection claims, AFCA is also receiving increasing numbers of complaints about delays with the finalisation and payment of death benefits.”

Appearing before the Senate economics reference committee, ASIC deputy chair, Sarah Court, was asked by senator Andrew Bragg if the corporate regulator is aware of the delays being incurred by members. 

Court said: “Some of those themes that are subject of those media reports are about processing delays for up to two years and poor communication via the trustee with members. 

“We are also aware that there is a high number of AFCA complaints in relation to those issues as well so we are looking at them. We think they are conduct issues by the superannuation trustees, we are prioritising a look at that in the next little while.

“This is an issue we have elevated to be a priority issue for us.”

Earlier this year, Super Review covered how there are issues with super funds’ internal dispute resolution (IDR) processes that is prompting to contact AFCA directly.

While members are encouraged to first contact their super fund in order to resolve a complaint via the internal dispute resolution (IDR) process, AFCA said the number of members contacting them directly is on the rise.  

Of all complaints referred back by AFCA to a super fund last financial year, 55 per cent were from consumers who contacted AFCA first rather than their fund’s IDR team. From May 2023, this percentage has increased further to 66 per cent, which AFCA has flagged as a concern.

AFCA told Super Review a lack of engagement with IDR might indicate a “breakdown of trust” with the fund or inadequate identification of a member’s expression of dissatisfaction.
 

Read more about:

AUTHOR

Add new comment

The content of this field is kept private and will not be shown publicly.

Recommended for you

sidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

2 months 1 week ago
Kevin Gorman

Super director remuneration ...

2 months 2 weeks ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

2 months 2 weeks ago

A healthy lifestyle doesn’t have to be a question of all or nothing. If you can take small, consistent steps to improve your wellbeing, then you’re on the right track. It...

1 day 4 hours ago

The $24 billion fund is now providing full-time super guarantees for part-time employees rejoining the workforce. ...

2 days 16 hours hence

New research by the Financial Services Council reveals Australians largely agree with the government’s proposed wording for the objective of superannuation towards retire...

1 day 14 hours hence