The superannuation industry has apologised for systemic failures that left Australians grieving the death of a loved one with added distress.
The Australian Securities and Investments Commission (ASIC) released its landmark death benefit claims handling report today which investigated 10 trustees — Australian Retirement Trust, Avanteos, Brighter Super, Commonwealth Superannuation Corporation, HESTA, Hostplus, NM Super, Nulis, Rest and UniSuper — over the two years to March 31, 2024.
It found that none of the trustees, which together represent 38 per cent of all member benefits in super, monitored or reported on their end-to-end times for handling claims or performance.
The report also identified that 78 per cent of claims that were reviewed in the two-year period were delayed due to processing issues within the trustees’ control, with members living in First Nations postcodes experiencing even greater delays.
Of those claims, 27 per cent were met with poor customer service including phone calls not being returned, queries dismissed and claimants asked for unreasonable information.
“Many of the complaints we read were distressing. We saw deep grief, vulnerability, frustration and genuine suffering,” ASIC Commissioner Simone Constant said.
In one case, a trustee took more than 500 days to pay a $100,000 death benefit to a woman grieving the loss of her husband but still has not received the payment.
The report found the trustee had failed to respond to her concerns about financial hardship and did not support her when she struggled to navigate the claims process.
In another instance, a wife whose husband of more than 20 years had died from cancer, received the $600,000 death benefit payment three weeks later than she should have.
She also faced poor customer service after several months of frustrating interactions, including when it took two months and two follow-ups to receive a response to a query.
ASIC called on the super industry to immediately review and address death benefit claims handling deficiencies by adopting its 34 recommendations, including streamlined processes and procedures, better guidance and training for staff and removing barriers for First Nations members.
“Grieving Australians should not have to suffer further stress because of the failure of superannuation trustees to approach claims in a timely, clear, and respectful manner,” Constant said.
“At the heart of this issue is leadership that doesn’t have a grip on the fund’s data, systems and processes — and ultimately it is the customers who suffer for it,” ASIC chair Joe Longo added.
“This kind of disconnect is unacceptable in any area of corporate Australia, but in the superannuation sector it is particularly serious, because super affects everyone from the boardroom to the living room.”
The Association of Superannuation Funds of Australia (ASFA) has welcomed the report and apologised for the problems plaguing the sector.
“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,” ASFA chief executive Mary Delahunty said.
“As a sector, we are committed to keep working until we get it right.”
