The superannuation industry in Australia has acknowledged significant shortcomings in handling death benefit claims, resulting in additional distress for grieving families. A report by the Australian Securities and Investments Commission (ASIC) scrutinised the claims processes of ten major trustees, including Australian Retirement Trust and HESTA, over a two-year span, revealing that none of these entities effectively monitored their claims handling times or performance.
The investigation discovered that 78% of the examined claims faced delays caused by issues within the trustees’ control, with Indigenous Australians experiencing the longest wait times. Furthermore, 27% of claims were marred by poor customer service, including unreturned calls and unreasonable demands for information from claimants. ASIC Commissioner Simone Constant expressed concern over the emotional toll this has taken, citing distressing accounts of grief and frustration from affected individuals.
In one troubling case, a woman still awaiting a $100,000 death benefit payment endured a wait of over 500 days following her husband’s death, with the trustee failing to address her financial hardships during the process. Another instance involved a widow receiving a $600,000 payout three weeks late after prolonged frustrating communications.
ASIC has urged the superannuation industry to rectify these failings by implementing its 34 recommendations, which include improving operational procedures, enhancing staff training, and removing barriers that hinder Indigenous members. Constant emphasised that bereaved Australians should not face further stress due to the inefficiencies of superannuation trustees, while ASIC Chair Joe Longo highlighted the critical need for better oversight of data, systems, and processes within the sector.
The Association of Superannuation Funds of Australia (ASFA) has expressed regret regarding the detrimental impact on families during their times of loss. ASFA’s CEO, Mary Delahunty, acknowledged the industry’s shortcomings and committed to ongoing improvements to ensure better service for members and their loved ones moving forward.