Superannuation complaints to the Australian Financial Complaints Authority (AFCA) about delays in claim handling have persisted into financial year 2024, as Stephen Jones continues to express his concerns on the matter.
Complaints regarding delays in claim handling have more than doubled to 1,738 complaints in the past financial year, an increase of 126 per cent. These complaints now account for one in four of AFCA’s superannuation complaints in FY24 year to date.
In the financial year up to October 2023, there have been 600 complaints logged for this issue within superannuation.
Speaking at a member forum session on Friday (17 November), Anne Maree Howley, senior ombudsman at AFCA, said the Minister for Financial Services Stephen Jones spoke with the body on 15 November.
“He noted that the superannuation industry had done an excellent job in producing accumulated wealth for retirement for its members. However, he was not so complimentary about the level of service, consumer support and consumer redress for members the industry is providing,” she explained.
“In particular, he spoke again of his concerns in relation to the increase in AFCA superannuation complaints. Delays in claim handling create an issue for those who are at their most vulnerable.”
Jones has been vocal over the last year about super funds acting faster on delays and gave funds a deadline of the end of 2023 to improve the significant delays encountered by fund members.
“We often see cases where trustees could have been more proactive in overseeing the insurer’s handling of the claim and could have provided clearer information to the member about how their claim would be managed,” Howley continued.
With nearly one in three super complaints relating to service quality in FY23, Howley noted that this trend has also continued in FY24.
Earlier this month, Senator Andrew Bragg asked for a clear timeline for action on addressing super complaints regarding delays in death benefit payouts, in a letter addressed to Jones.
Dated 6 November 2023, Bragg called on the Minister for Financial Services and ASIC chair Joseph Longo to prioritise serious misconduct issues on the part of superannuation trustees.
In the Australian Financial Complaints Authority (AFCA) 2022–23 annual report, it revealed there were 6,957 complaints related to super compared to 5,286 in the previous year.
He noted that some 377 complaints made to AFCA were about lengthy delays in super payouts, which was in addition to some 1,400 complaints made to AFCA about group life insurance in the super sector for the same financial year.
“Given this matter is within the remit of your portfolio, I ask that you provide a timetable for action on this matter so that Australians can access the much-needed benefits that they are entitled to from superannuation funds,” Bragg stated.
“Australians cannot wait until the next Senate estimates in February 2024 for an answer.”