ASIC finds systemic failings in superannuation death benefit claims handling
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The news: The Australian Securities and Investments Commission (ASIC) has hit superannuation trustees with a raft of 34 recommendations linked to their handling of death benefit claims, after the regulator found excessive delays, poor customer service, and ineffective claims handling procedures at 10 major funds, including Australian Retirement Trust, Hostplus and UniSuper.
ASIC's recommendations include calls for faster response times, improved claim monitoring; removing barriers for First Nations members and claimants, and staff training.
The numbers: The funds investigated by ASIC represent 38% of all member benefits in superannuation funds regulated by the Australian Prudential Regulation Authority.
According to ASIC's research, the fastest superannuation trustee closed around 48% of death benefit claims in 90 days. The slowest trustee closed around 8% of claims in the same period.
Of the claim files ASIC reviewed, 78% had delays caused by processing issues within the trustee’s control, the study found.
The context: ASIC has sued AustralianSuper and Cbus in recent months over alleged claim failures. The regulator has previously cited concerns over systemic failures within the industry.
What they said: ASIC Chair Joe Longo 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".
The source: ASIC
