Super funds’ complaints handling processes are firmly in the spotlight after ASIC identified several problem areas that need fixing.

ASIC found almost 20 per cent of super funds consistently failed to respond to complaints from members within the mandatory 45-day timeline required by Regulatory Guide 271 Internal dispute resolution (RG 271). In almost half of the cases, funds did not provide a reason for the delays to members.

“Fund members find the complexity of the superannuation system and its regulation challenging and have high expectations of their funds in terms of the support they will provide,” AFCA lead ombudsman, superannuation, Heather Gray tells Investment Magazine.

This can result in complaints about fund service quality, which attracted 774 complaints in the last financial year.

Gray believes many superannuation complaints boil down to the quality of trustees’ disclosure and communication.

“Even in cases where AFCA is satisfied the member was given relevant information, we often see that the complaint may have been avoided or resolved more readily if the communication had been more clearly written, timelier or delivered in a different way,” she says.

She urges funds to have what AFCA calls a “resolution mindset” when addressing complaints.

“Complaints resolution works well when the fund, or trustee, focuses on the person with a concern and works with them to unpack and understand what has gone wrong,” she says.

Delays top complaint list

Super funds’ complaints handling delays have typically been the biggest complaint received by the Australian Financial Complaints Authority (AFCA) since it began work in November 2018.

Indeed, AFCA, an external dispute resolution scheme for consumers unable to resolve complaints with their financial services providers, received 1,260 complaints about super fund delays in handling complaints in 2019/20.

This number dropped off to 856 in in the 2020 financial year and 737 in 2021 financial year. Over the three financial years under review, delays outweighed the other top issues of complaint, these being service quality, account administration errors, denials of claims and claims amounts.

When it comes to superannuation products, the top complaints during this period revolved around the administration of accounts, eligibility for insurance cover, the denial of disability claims and the allocation of death benefits.

Funds on notice