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Govt urged to clarify and appropriately fund SCT
The Federal Government has been told that it should separately declare funding arrangements for the Superannuation Complaints Tribunal (SCT).
In a move which appears to reflect on the fact that the SCT is currently funded under the auspices of the Australian Securities and Investments Commission (ASIC), the Association of Superannuation Funds of Australia (ASFA) has called for greater separation of how the Tribunal is funded.
ASFA has made its point strongly in a submission lodged with the Federal Treasury on the latest Financial Services Supervisory levy arrangements.
"Funding of the SCT – the amount of funding allocated to the SCT from the levy should be separately identified," it said.
"In addition, Treasury and ASIC should urgently review the SCT's funding needs to ensure it is adequately resourced to address its workload and meet its statutory objectives."
The submission said ASFA was of the view the provision of specific and adequate funding to the SCT via the ASIC component [of the levies] was critical.
"ASFA is concerned that the level of funding provided to the SCT on an ongoing basis is not adequate to ensure that it can effectively deal with the volume of complaints received, within an appropriate time frame," it said.
The submission said that ASFA members were reporting increased activity within some parts of the legal profession such that fund members were being actively encouraged to pursue litigation in respect of a benefit entitlement (particularly in relation to claims for insured disablement benefits) instead of following their fund's usual benefit claim and complaints process.
"The outcome of that claims and complaints process would typically involve a dissatisfied member complaining to the SCT and having their complaint heard without cost and without the need for legal representation," it said.
"In contrast, where a member engages legal representation and pursues a claim through the courts, the costs involved may in some cases represent a material portion of any benefit ultimately paid out."
"ASFA, and our members, are deeply concerned that adopting this course may lead to sub-optimal outcomes for many fund members."
The submissions aid one of the reasons cited by some legal practitioners and law societies for the increased trend toward litigation was the time taken for fund members to achieve a resolution of their complaint through the SCT.
"ASFA accordingly urges ASIC and Treasury to urgently consider the adequacy of the funding provided to the SCT to ensure that it can conduct its ongoing operations in an effective and efficient manner, and fulfil its purpose of ensuring accessible, timely and fair resolution of complaints."
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