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(August-2004) SCT cautions employers about delays
The Superannuation Complaints Tribunal (SCT) has fired a shot across the bows of employers, warning them that they need to be much more timely in notifying superannuation funds about the departure of employees.
The SCT’s Quarterly Bulletin says the Tribunal receives a number of complaints each quarter concerning the time it takes for trustees to either transfer funds or pay out benefits following a member ceasing employment.
However, it says investigation of such complaints often reveals that it is the employer and not the trustee which is the cause of the delay.
“Some employers delay notifying trustees that an employee has terminated his/her employment and/or delay in forwarding the final employer contribution to the trustee — sometimes by several months,” the Bulletin says.
It says that during that time, funds’ crediting rates may have changed to the disadvantage of the employee.
“Ideally, employers ought to be in a position to provide such information to trustees and forward any outstanding contributions due on the day an employee leaves the service of the employer,” the Bulletin says.
The Bulletin also reveals that during the March quarter, the number of complaints received by the SCT increased by 8.1 per cent to 494, with the majority relating to disablement benefits.
It says complaints relating to disablement benefits accounted for 22.7 per cent, while those relating to death benefits accounted for 22.5 per cent and those relating to administration accounted for 20 per cent.
Interestingly, in the current choice of fund debate, complaints about fees and charges accounted for only 4.5 per cent of those received by the Commission.
AUTHOR
Mike Taylor
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