Death benefits delays ‘front and centre’ for ASIC

22 February 2024
| By Rhea Nath |
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ASIC has flagged that the superannuation sector remains a key area of focus in the coming year, with death benefits ‘front and centre’ for the regulator.

Appearing in the Senate economics legislation committee last week, ASIC deputy chair Sarah Court said claims handling by super trustees remains a priority.

“We have a dedicated project relating to delivery of member services by superannuation funds and it’s a multi-phase project. We’re going to be doing it throughout 2024 and beyond. We are focused initially on death benefits claims handling,” she said.

Investigations were already underway, Court observed, and ASIC remained aware of systemic complaints handling issues reported by the Australian Financial Complaints Authority (AFCA) and media reports of trustees engaging in “unacceptable” delays in processing of these claims.

“It is front and centre for us, I haven’t got a case to announce to you today, but I can assure you we will be continuing to focus on it this year,” she asserted.

In November 2023, the ASIC executive was asked by senator Andrew Bragg if the corporate regulator is aware of the delays being incurred by members.

In an appearance before the committee then, 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.”

She has now reiterated that ASIC is aware of “multiple distressing experiences of members by the super funds” and agreed with Senator Bragg’s assertion that funds could continue to fall short of member expectations unless there was a crackdown.

“Yes indeed, we need to look at systemic issues in super funds, and the way that trustees are dealing with their members is something that we need to look at, and are looking at, in a systemic way,” she said.

Court also highlighted that the regulator remains “extraordinarily active” in enforcement within the superannuation sector.

“We’ve got 10 matters before the courts at the moment, including TelstraSuper, AustralianSuper, and Active Super, and a number of others. We want to reassure you; we are in court in relation to super trustees as we speak in multiple matters,” she said.

At the start of 2024, AFCA said it has recorded 100,000 complaints in a calendar year.

While scam-related complaints to AFCA nearly doubled between 2022 and 2023, there were also rises in complaints about other financial products that AFCA covers, which included superannuation, banking and finance, insurance, and investments and advice.
 

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