ASIC’s senior executive leader of superannuation and insurance Jane Eccleston believes super funds should be viewing complaints as a “canary in the coalmine” for systemic issues at their funds.
Much has been written about the increase in super fund complaints, which rose by 135 per cent in the 2022–23 financial year according to the Australian Financial Complaints Authority (AFCA) and the matter has even been raised in the Senate economics reference committee.
Speaking at the ASFA conference in Adelaide, Eccleston said: “ASIC’s work has focused on member complaints being resolved in a considered and timely fashion. Our review on internal dispute resolution highlighted significant compliance issues in this area with serious improvement needed by some trustees.
“I’d like to point out that member complaints can be a canary in the coalmine and show where the issues are so trustees can respond before a serious issue arises and it comes to the regulator’s attention.
“If your fund is not effectively identifying themes and systemic issues from complaints and escalating them for further attention then now is the time to do so.”
Minister for Financial Services Stephen Jones has also put super funds on notice until the end of the year to improve their practices.
Asked what will happen once it hits 2024, Eccleston warned funds could face penalties or enforcement action if they haven’t sufficiently stepped up their game.
“You will have already seen we have commenced enforcement action in relation to a trustee, so with anything there is a whole range of ASIC action available. Sometimes it’s contacting the trustee and getting them to fix the problem and other times we take more dramatic steps and it’s going off to court and giving them a penalty,” Eccleston said.
In November 2023, ASIC commenced civil penalty proceedings against TelstraSuper for failing to comply with internal dispute resolution requirements. ASIC alleges that 40 per cent of TelstraSuper’s responses to complainants during the relevant period did not comply with its own dispute resolution procedures, which included 106 complainants who were not responded to within the applicable 45-day time frame.
TelstraSuper is the trustee of the Telstra Superannuation Scheme that has over 91,000 members and more than $23 billion in funds under management as at 30 June 2022.