ASIC rejects Covid backlog explanation in AustralianSuper lawsuit
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More news: ASIC deputy chair Sarah Court has rejected AustralianSuper's statement that the Covid pandemic led to the backlog in death claims that is the subject of a lawsuit. Court told journalists that the alleged long-term conduct targeted by the regulator took place either side of the pandemic and was the reason given was "not good enough".
Court added that this is the second similar court action taken in recent months, after ASIC sued Cbus over alleged claims failures in November.
ASIC is about to release a report "very shortly", Court said, "that will indicate the breadth and our concerns about misconduct. We think it is widespread, and we think it's having a big impact on members and their families."
"It's certainly possible we'll have more court cases down the line," Court said.
"I'm not really calling for reforms at the moment. What we're trying to do as the conduct regulator is send a very clear message to superannuation trustees in that if you fall down in services to your members, then we're going to come and we're going to take court action," Court said.
On taking action against individuals over the systemic issues ASIC has observed in the superannuation industry, Court said the watchdog considers whether individuals need to be held to account "in every case we investigate". She added that new financial accountability rules coming into effect this month, which place a greater focus on directors and senior executives in financial institutions, mean the regulator will look at "future matters through that context".
"We've got new [the] new financial accountability regime that comes into effect just this month for [the] superannuation sector, we will certainly be looking at future matters through that context, that they may have to pay interest on the delays or whatever.
AustralianSuper mulls ASIC claims, flags reduction in processing times
More news: AustralianSuper said it is considering allegations made by the Australian Securities and Investments Commission (ASIC) after the regulator sued the super fund over its handling of death benefit claims.
The super fund said a backlog of death claims emerged after a "sharp increase" in member deaths during the Covid pandemic. AustralianSuper then brought its processing of death claims in house after deciding that its service provider was not reducing the backlog fast enough.
What they said: "We are considering ASIC's claim carefully and will respond on the substance of the claim in due course," said an AustralianSuper spokesperson.
"... AustralianSuper is fundamentally transforming how we deliver member services. We are part way through a $120 million investment in service improvements, including bringing operations in house that require high care and empathy.
"Since our in-house Bereavement Centre was launched in April 2024 with 75 dedicated case managers handling death claims from start to finish, we have seen a significant reduction in claim processing times.
"We welcome the regulator’s industry-wide attention on this matter."
Meanwhile, in a speech at the AICD Australian Governance Summit, ASIC chair Joe Longo said: "This morning, some of you would have seen ASIC has sued AustralianSuper, the trustee for Australia’s largest superannuation fund, for death benefits claims failures."
"This matter is about protecting vulnerable Australians and their families. It is also a demonstration of what can happen when there is not adequate oversight of systems in an organisation."
ASIC sues AustralianSuper over delayed processing of 7,000 death benefit claims
The news: The Australian Securities and Investments Commission (ASIC) is suing the country's largest superannuation fund over the delayed processing of nearly 7,000 death benefit claims.
The numbers: According to proceedings filed in the Federal Court, ASIC alleges that between 1 July 2019 and 18 October 2024, AustralianSuper failed to process death benefit claims "efficiently, honestly and fairly" when it took between four months and four years from the date the claim form was returned to assess at least 6,897 death benefit claims.
ASIC also claims that AustralianSuper failed to pay member’s benefits "as soon as practicable" after the member’s death in respect of at least 752 members. In one case, despite having all the information required to pay the benefit, it took AustralianSuper 1,140 days to make the payment. Others took 438, 412 and 366 days.
In 254 cases, AustralianSuper took between 15 to 213 days to provide the claim form, according to ASIC’s allegations.
The context: ASIC is seeking penalties, declarations, an adverse publicity order and orders for compliance matters to be implemented.
The regulator noted that member services failures in the superannuation sector remain one of its enforcement priorities.
Last November, ASIC initiated civil penalty proceedings against United Super, the trustee of rival super fund Cbus, alleging delays in processing death benefit and total and permanent disability claims affecting more than 10,000 members and claimants.
What they said: ASIC deputy chair Sarah Court said, "At its heart, this matter is about protecting vulnerable Australians and their families.
"It is vital that death benefit claims are processed in a timely manner. Delays are likely to cause further pain and anxiety to people who are already suffering from grief, making what is already a difficult time even harder."
The sources: ASIC media release, AustralianSuper statement, ASIC chair speech
