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Funds to get new service standards after high-profile failures
New reforms announced on Tuesday will target “critical areas” at super funds where complaints data shows the greatest need for improvement, including the “timely and compassionate” handling of death benefits, fair and efficient processing of insurance claims and accessible communications with members.
Financial services minister Stephen Jones said that the move would complement the government’s reform of the retirement phase of super and the Delivering Better Financial Outcomes package.
“These reforms are all about strengthening the superannuation system by improving member outcomes,” Jones said in a release. “The new standards will improve how funds engage with their members and put member interests at the heart of service delivery.
“Superannuation is a powerhouse of prosperity for Australians. With a $4.1 trillion system delivering strong returns, workers are retiring with an average balance of over $200,000. The government is ensuring that the same high standards Australians expect in investment performance also apply to member service.”
Jones said that while most funds “offer services that meet or often surpass community expectations”, some funds have fallen short.
Last year, ASIC took construction industry fund Cbus to court over alleged failures to process death and TPD benefits within reasonable timeframes, which saw them paid out late and resulted in members and claimants wearing a $20 million loss. Cbus also allegedly failed to assess the scale of the delays, and the systemic nature of the problem, and then allegedly failed to take action to reduce the delays. ASIC also alleges that it made false and misleading statements by failing to make sure that its report of the issue contained all the information it was supposed to.
Cbus is not the only fund that’s experienced administration woes in recent years, with some AustralianSuper members locked out of their accounts for months in 2023 following an upgrade to the fund’s Member Direct portal. Though no fault of the fund, UniSuper members were also locked out of their accounts back in May following the accidental deletion of UniSuper’s private Google Cloud account.
The reforms were welcomed by a number of funds, including Australian Retirement Trust (ART) and Aware Super, with Aware chief Deanne Stewart highlighting its own attempts to improve member servicing by insourcing its administration and uplifting its digital capabilities.
“We believe we are the largest super fund to have completed such a transformation and our members are now seeing the benefits, with the majority of transactions now able to be completed quickly and easily online,” Stewart said. “There is always scope for improvement and we remain focused on continuing to enhance our response times and quality of interactions with members, which requires constant effort and innovation.”
ART chief executive David Anderson said the reforms were a “step forward” for the sector and important for ensuring Australians’ retirement investments are managed with the standard of service and care that they “expect and deserve”.
“We look forward to working with the government, consumer advocates, regulators and the broader superannuation industry to develop the standards and ensure all Australians receive financial security for retirement with fairness and dignity,” Anderson said.
