26 September 2023

ASIC uncovers superannuation complaints

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The Australian Securities and Investments Commission (ASIC) has uncovered indications of significant problems in the handling of complaints from superannuation fund trustees.

According to ASIC, the board of trustees (or directors) in a super fund is the trustee of the trust and holds legal title and ownership of the fund’s assets on behalf of the members.

ASIC Commissioner Danielle Press said the issues were found during the first stage of the Commission’s surveillance of the compliance now required of trustees’ due to new enforceable requirements which took effect on 5 October last year.

Ms Press said the 38 funds in ASIC’s review covered public sector, industry, retail and corporate funds, and managed approximately 16.5 million member accounts and over $1.5 trillion in assets.

“Dispute resolution is an essential part of the consumer protection framework in Australia,” Ms Press said.

“A trustee’s approach to dispute resolution is a meaningful measure of whether they are focused on the interests of their members,” she said.

“It also indicates the maturity of the trustee’s approach to risk.”

Ms Press said that when done well, dispute resolution could benefit trustees by helping build members’ trust and confidence.

However, she said the first stage of ASIC’s surveillance identified some problem areas that needed fixing.

“We want trustees that have fallen behind to strengthen their internal dispute resolution arrangements to make sure that member complaints are handled in an effective, fair and timely way,” Ms Press said.

She said super fund trustees were required to record all member complaints, but the funds ASIC looked at recorded complaints at a rate of 30 for every 10,000 members.

Ms Press said the Commission was concerned that the low complaint rate may be a result of some trustees failing to record all member complaints or adopting an inappropriately narrow definition of ‘complaint’.

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