The superannuation industry has been relegated to being a “bit player” in the set up process around the Australian Financial Complaints Authority (AFCA), according to Australian Institute of Superannuation Trustees (AIST) chief executive, Eva Scheerlinck.
In a column to be published in the upcoming print edition of Super Review, Scheerlinck expressed concern at the degree to which the Government had pursued the establishment of the one-stop-shop external dispute resolution (EDR) framework without undertaking appropriate economic modelling of the consequences.
“One of the reasons for the Government’s decision to combine the dispute resolution bodies is that complaints before the Superannuation Complaints Tribunal (SCT) can face significant delays,” she wrote. “However, it is well-recognised that for the most part, these delays are a consequence of chronic underfunding and not a deficiency in the operation of the tribunal.”
“Moreover, there was no economic modelling or quantitative work that assessed the pros and cons of keeping the three existing complaints schemes versus consolidating the three bodies into one entity,” Scheerlinck said.
“While AIST can see some merit in a one-stop shop for financial complaints, we have a number of concerns about the way super complaints would be handled under the new body. And as the months fly by and we get closer to AFCA’s start date next year, we are increasingly concerned that the super industry is being relegated to a bit player in the set-up process,” she said
Scheerlinck said that since the Government’s announcement in May to establish AFCA, legislation had been put together with limited industry consultation.
“In an unusual move, the legislation was introduced into the Senate rather than the more typical introductory route through the House of Representatives. The Bill was immediately referred to the Senate Economics Legislation Committee, which conducted a hearing in early October. While the purpose of the hearing was to examine any issues associated with measures outlined in the Bill, representatives from the super industry were not provided with the opportunity to appear before it,” the column said.
“For superannuation, the move to a new complaints body is the biggest reform to external disputes resolution since the SCT was established over 20 years ago. Superannuation cannot be an afterthought in this reform process.”
“AIST believes it is in the best interests of both fund members and superannuation funds if the current strengths and protections of the SCT are retained in any new EDR body. As it stands now, there are holes in the legislation that would result in some funds members or potential beneficiaries being worse off.”
