Super complaints jump 5% in FY23–24

There was a 5 per cent rise in complaints to AFCA relating to superannuation in the financial year 2023–24, according to its annual report.

The Australian Financial Complaints Authority (AFCA) has revealed that there were 7,325 complaints related to super, up from 6,957 in the previous fiscal year.

Despite this rise, AFCA said that superannuation complaints have consistently accounted for about 7 per cent of total complaints, highlighting ongoing challenges within the superannuation system.

Meanwhile, 7,701 complaints were closed over the period, with AFCA also saying that it also had a backlog of complaints from FY22–23.

In terms of complaints by product, account administration cases took the top spot with 4,391 complaints over the financial year, up from 4,369 the year before.

“These complaints typically involve delays in rollovers and withdrawals, errors in investment switches, and difficulties with online services,” AFCA said.

Moreover, complaints about total and permanent disability (TPD) saw a notable increase of 26 per cent, totalling 1,245 cases.

According to the complaints authority, this category includes complex issues such as eligibility disputes, delays in decision making, and detailed medical assessments.

This was followed by income protection (932), death benefit (708), and pensions cases (97).

Turning to complaints by issue, the number of cases related to delays in claim handling fell from 1,738 in FY22–23 to 1,730, although it remains the top super complaint in this category.

However, this was in stark contrast to the 135 per cent rise in complaints that claim handling received in the prior corresponding period.

Account administration errors came in second, with 746 cases, followed by service quality (602), failure to follow instructions/agreement (419), then claim amounts (381).

Moreover, 42 per cent of superannuation complaints were resolved at the registration and referral stage.

But, according to AFCA, these extended resolution times reflect the complexity of the superannuation industry.

“Superannuation complaints are notably complex, with trustees given 30 days for initial resolutions, 45 days for other complaints, and 90 days for death benefit distribution complaints,” the complaints authority said.

“Despite these extended timelines, 12 per cent of cases were resolved within 30 days and 33 per cent between 31 and 60 days. Only 3 per cent of cases exceeded a year to resolve.”

Looking ahead, AFCA said that technical advancements and cyber risks remain a key industry trend.

“Technological advancements are reshaping the superannuation landscape, offering potential for improved member services and complaint handling through enhanced digital interfaces and automated processes,” it said.

“However, these advancements also bring risks, such as increased vulnerability to cyber fraud.

“While complaints about scams and fraud within super remain low, AFCA is very concerned there are signs that cyber criminals are beginning to turn their attention to the superannuation industry, and we strongly urge trustees to strengthen their safeguards against this activity.”

Moreover, the body said that many complaints can also be traced back to unclear or inadequate communication and disclosure, alongside a “mismatch” between member expectations and the services and products offered by their fund.

“Ongoing member education is crucial to prevent misunderstandings, ensure that members have a realistic understanding of the services and benefits offered by their fund, and reduce the volume of complaints,” AFCA said.