TRANSCRIPT
Australia's financial regulator has taken aim at a 4.1 trillion dollar superannuation industry.
The chair of ASIC, Joe Longo, accusing providers of what he called widespread neglect of their customers.
"This is one of the most significant reports we have produced in my time at ASIC and it identifies a range of failings, including excessive delays and poor service when dealing with claims. Now, consider for a moment what this may mean for a person making a claim. When a beneficiary suffers delays in the processing of a death benefit, not only do they suffer the stress of having to engage with a complicated process while grieving, but they may be denied access to money they are entitled to, and which they may need to pay bills, ongoing living expenses, or even funeral costs."
New findings by ASIC show an overwhelming number of complaints by grieving Australians, related to poor customer service and excessive delays to death benefits.
ASIC Commissioner Simone Constant says super funds have failed to match the needs of their customers.
"Our review identified a range of problems including gaps in trustee data, reporting and metrics; none of the reviewed trustees monitored or reported on their end-to-end claims handling processes or performance; unclear and inconsistent processes and procedures; we found 78% of the claim files that we reviewed were delayed by processing issues within the trustees' control."
The ten superannuation funds under review represent 38 percent of all member benefits in Australia... excluding two industry giants already facing legal proceedings over their handling of death and disability claims.
ASIC also found First Nations communities waited significantly longer for claims to be closed.. and that communication was often not culturally sensitive.
Its report highlighted one case where a trustee took more than 500 days to pay a death benefit of around $100,000 to a First Nations woman grieving the loss of her husband.
Bettina Cooper is a senior financial counsellor with Mob Strong Debt Help.
"I can think of examples where people just give up. You can only try so hard to access something that is yours and you hit so many barriers before you stop trying. We know when we go out in community we actually have lines of people wanting to talk to us to help them access their money through super. For some First Nations people it is the only intergenerational wealth they'll ever have. First Nations people still have a gap, and that gap is about building generational wealth. Superannuation should be filling that gap."
Removing barriers for First Nations claimants was among ASIC's 34 recommendations in its report.
Advocates like Bettina Cooper say it's past time for change.
"We've been working with banks for years on making money accessible for First Nations people and making the process accessible. Superannuation funds are still back at the starting line. It is time for us to have mandatory legislated minimum standards of service, and those services need to include First Nations people and need to include fair and reasonable access, timely claims, and the ability for people to be able to do this with dignity and respect."
Mary Delahunty is the Chief Executive of the peak industry body, the Association of Superannuation Funds of Australia.
She says the report is sobering reading.
"We note the really deep and good work the regulator has done to help us improve, really over the last year, the service standards, particularly in death benefits claims' handling time, but it's not an easy read and we are really sorry for all the stress that has been caused."
The funds themselves are yet to respond to ASIC's findings.
