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Super sector apologises for shortcomings in death benefit processing
The super sector has apologised and vowed to fix widespread delays, poor service, and systemic failures in processing death benefit claims, following an ASIC review.
Major industry bodies have acknowledged, and pledged to fix, the superannuation sector’s shortcomings in death benefit claims handling, after ASIC released concerning findings this week.
Namely, on Monday, the Australian Securities and Investments Commission (ASIC) released 34 recommendations for superannuation trustees, prompted by its alarming review of death benefit claims handling. The review uncovered significant delays, poor customer service, and systemic failures, all of which, ASIC said, exacerbated the grief of beneficiaries.
The report, Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve (Report 806), examined the claims handling practices of 10 trustees representing 38 per cent of all member funds in APRA-regulated super funds.
The findings revealed significant deficiencies across the industry, with ASIC chair Joe Longo calling for urgent leadership and reform.
In response on Monday, the Association of Superannuation Funds of Australia (ASFA) CEO Mary Delahunty said: “The superannuation sector knows we have let down some of our members and their families at a time when they needed us, and we are sorry.
“While the majority of our members and their families have a seamless experience with death benefits claims, we know we need to do better to make sure this is the experience of as many people as possible.”
Acknowledging case studies within the report that pointed to excessive wait times, lack of communication, and inconsistent processes, Delahunty said these examples of unsatisfactory service are “not acceptable”.
Namely, ASIC’s report showed that while the fastest trustee closed nearly 48 per cent of death benefit claims within 90 days, the slowest trustee managed only 8 per cent in the same time frame.
According to Delahunty, while ASFA stands ready to examine further areas of improvement, the association has already rolled out a new Death Benefits Payments Service Standard, aimed to ensure better communication, timely updates for claimants, and a more compassionate approach.
Improvements in death benefits claims handling delays are already showing, she said, citing the latest AFCA complaints data, which revealed a drop from 379 complaints in 2023 to 179 in 2024, with just 33 complaints reported over the last two quarters.
“We commit to keep working until we get it right for all our members and their families,” the CEO said.
Also responding to the report on Monday, Super Members Council (SMC) CEO Misha Schubert said that the industry body acknowledges the findings with “deep empathy”.
“Super fund members and their families rightly expect and deserve the highest standards of service, care and compassion – especially in the hardest of times,” Schubert said.
While she said that profit-to-member funds have focused on improving claims handling over the last year, the CEO said that there is more work to be done.
“We are deeply committed to ensuring the highest possible standards of customer service – that’s what Australians with their retirement savings in super rightly expect,” Schubert said.
The SMC also acknowledged ASIC’s findings, suggesting funds are failing to adequately support First Nations claimants, emphasising the need for government action to cut regulatory red tape and accelerate claims processing.
“That’s why we strongly advocate urgent legal reforms to enable digitised binding death nominations and legal recognition of the kinship structures of First Nations members,” Schubert said.
Also addressing service gaps for First Nations members, Delahunty said: “Getting services right for First Nations members and their families is a priority, which is why there is specific guidance for culturally appropriate communication, and streamlined identification processes in the ASFA Death Benefits Payments Service Standard.”
Looking forward, Delahunty said ASFA will continue to work with Treasury to deliver improvements for members and their families.
“We commit to keep working until we get it right for all our members and their families,” she said.
AUTHOR
Jessica Penny
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