ASIC targets super funds over customer complaints
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The news: ASIC will launch a new review into the trustee boards of superannuation funds and their complaints-handling processes after finding funds have repeatedly failed to pay death benefits to their members on time.
ASIC said it will scrutinise how trustees learn from complaints to identify and address systemic issues with the delivery of member services. The regulator will begin gathering information from funds over the coming months, with its review findings to be released next year.
The context: ASIC said its death benefits review — which found funds had poorly handled payments, leading to excessive waiting times — had exposed blindspots among super trustees which had allowed customer issues to fester and could be a breach of their enforceable obligations. The regulator is currently suing AustralianSuper over the delayed processing of 7,000 claims.
As a result of escalating regulatory action, lawyers told Capital Brief that directors could be permanently disqualified if found in breach of their duties.
What they said: In a speech delivered to the American Chamber of Commerce in Australia, ASIC chair Joe Longo said the new work on superannuation was triggered after regulator found super trustees were often not aware of what was going on in their own businesses.
"Let’s not forget, it’s already an enforceable requirement to regularly analyse complaint data to identify systemic issues. This is member services 101. So a failure of data, systems, and processes doesn’t just let their members down – it means trustees are failing to comply with their obligations. And, where appropriate, ASIC will pursue enforcement action in response to that failure," Longo said.
"It’s also why the next phase of ASIC’s work in the superannuation sector is to address these ‘board blind spots’. Specifically, our focus is on how trustees learn from and respond to the complaints they receive."
"Why? Because no business can thrive without understanding the people it serves. To do this, it needs market feedback. And a primary source of this feedback is – and always will be – customer complaints. A trustee’s approach to complaints is a clear and meaningful measure of whether they’re focused on the interests of their members. It also indicates the maturity of the trustee’s approach to risk. That’s why ASIC has been urging industry to act on complaints for some time now."
