Super fund trustees falling short too often: ASIC

3 June 2024
| By Rhea Nath |
image
image
expand image

ASIC has flagged that, while super fund members need to have confidence in their funds’ ability to provide “efficient and fair” service delivery towards retirement, trustees are falling short too often at the moment.

In a speech at the Australasian Investor Relations Association (AIRA) conference last week, ASIC commissioner Simone Constant shared that superannuation member services remains a strategic and enforcement priority for the regulator in 2024.

“Six million Australians are already at pension drawdown age, participating in their retirement. In the next 10 years, a further 3 million – 50 per cent more – will hit that phase,” Constant said.

“So, with that weight of expectation and need of good service delivery coming, we need super fund trustees to step up right now and step in to making sure they put good outcomes for members at the heart of everything they do. Members need confidence in efficient and fair service delivery to support them participating in a full and confident retirement.

“Too often though, at the moment, trustees are falling short on consistently meeting the fair expectations of their members.”

Particularly, she said the payment of death benefits, “obviously a critical point of service delivery for members’ families”, is an area of focus for ASIC.

In May, upon reviewing the public communications of 22 trustees with regards to death benefits, representing almost 70 per cent of total APRA-regulated super fund assets, ASIC shared some ‘disappointing’ findings and believed there were actions trustees could be taking to improve their approach and the experience of their members.

“We recently shared some interim findings from the surveillance we have been doing and called on trustees to improve their arrangements for dealing with death benefit claims – to meet their promises, their commitments for their members,” Constant said, adding that trustees should “stay tuned” for more on this later this year. 

In her address, the ASIC commissioner also cautioned super funds against falling short on financial reporting and auditing, given this is the first financial year in which these reports from super funds come within ASIC regulation.

“ASIC is very focused on the proactive surveillance of the financial reporting of listed entities. Some of our recent work shows that in some quarters, some listed entities need to lift their game in this regard,” she said.

Last October, the regulator looked at over 150 financial reports from companies across the ASX for the previous financial year, with more than a third of them “found wanting.”

“Investors fairly want to know if their money is working in the way they intend it – whether they’ve placed it on the stock market or they’ve placed it in their super funds. So, this is an important change that will continue to level the playing field and make accurate information transparent so that all investors – regardless of where their money sits – can know how it’s being invested,” Constant said. 

Emphasising the significant impact of super funds on Australian markets, she noted there remains almost a trillion dollars more in the super system than there is on the ASX boards. 

“Even when you look at the APRA-regulated superannuation funds, it’s almost pound for pound – just under $2.6 trillion in APRA-regulated super system compared to $2.7 trillion on the ASX,” she said.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

18 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

18 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

19 hours ago