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ASIC prioritises complaint delays by super funds
ASIC has stated delays in super complaints of up to two years are a high priority for them.
Last month, Super Review wrote how complaints to the Australian Financial Complaints Authority (AFCA) relating to super funds, in particular delays about complaints handling, were on the rise.
In its FY22–23 annual report, the organisation said there were 6,957 complaints about superannuation compared to 5,286 in the previous year.
The number of complaints related to delays in claim handling rose by 135 per cent, from 737 last year to 1,738 and AFCA said this related to delays in handling insured benefit claims.
“Many superannuation complaints to AFCA can be traced back to issues with service quality, including the clarity and effectiveness of internal dispute resolution processes and the responsiveness of the trustees when questions are raised,” it said.
“While these complaints mainly related to total and permanent disability and income protection claims, AFCA is also receiving increasing numbers of complaints about delays with the finalisation and payment of death benefits.”
Appearing before the Senate economics reference committee, ASIC deputy chair, Sarah Court, was asked by senator Andrew Bragg if the corporate regulator is aware of the delays being incurred by members.
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.”
Earlier this year, Super Review covered how there are issues with super funds’ internal dispute resolution (IDR) processes that is prompting to contact AFCA directly.
While members are encouraged to first contact their super fund in order to resolve a complaint via the internal dispute resolution (IDR) process, AFCA said the number of members contacting them directly is on the rise.
Of all complaints referred back by AFCA to a super fund last financial year, 55 per cent were from consumers who contacted AFCA first rather than their fund’s IDR team. From May 2023, this percentage has increased further to 66 per cent, which AFCA has flagged as a concern.
AFCA told Super Review a lack of engagement with IDR might indicate a “breakdown of trust” with the fund or inadequate identification of a member’s expression of dissatisfaction.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
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