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Scathing SCT assessment for apathetic fund
A superannuation fund has received a harsh assessment from the Superannuation Complaints Tribunal (SCT) for demonstrating "apathy" in its pursuit of an insurance claim on behalf of a member.
In a determination handed down in late April dealing with the manner in which a superannuation fund dealt with a terminally ill member's total and permanent disablement (TPD) claim, the SCT was critical of the approach of both the insurer and the superannuation fund, but was particularly critical of the attitude of the trustee.
The terminally ill fund member actually died before her $525,000 TPD claim was finalised by the insurer and the trustee and, in the first instance, her beneficiaries received only $375,000 as a death benefit before it eventually topped up by the payment of a further $150,000 reflecting the TPD claim.
The beneficiaries then sought the payment of interest on the part of the super fund and the insurer for the unreasonable delay in the payment of the insurance benefits.
In dealing with the issue, SCT member, Stephen Duffield, noted that the insurer had acknowledged that it had unreasonably delayed paying the second tranche of the insurance benefit and was prepared to pay interest on that amount, however he was less sympathetic towards the superannuation fund.
His determination said that the superannuation fund had failed "to demonstrate any constructive steps by the trustee: to ‘pursue an insurance claim for the benefit of a beneficiary, if the claim has a reasonable prospect of success'".
"The trustee's apathy in this regard is evident both at the relevant date of 3 February 2014 and throughout the complaint process which has extended for nearly two years," the determination said.
The SCT determination said that it was not satisfied the trustee's decisions in respect of the accuracy calculation and the interest concession on the delayed payment were fair and reasonable in their operation in relation to the complainant in the circumstances.
It ordered a recalculation of the interest concession with the superannuation fund to make up the difference beyond the amount paid by the insurer.
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