ASIC warns ‘failed’ super funds on member communications

Some superannuation funds which fail the annual performance test are also falling short on telling their members about their failure, according to the Australian Securities and Investments Commission (ASIC).

ASIC has conducted a review of member communications on the part of funds failing the test and has found that while there have been improvements, some funds need to take a more member-centric approach.

ASIC’s review found that some trustees took a reactive approach to performance test communications or significant events such as mergers and did not have cohesive communications strategies in place.

It said this meant that their communications to members were inconsistent or lacked clarity. To ensure that members understand the impact of relevant changes, trustees should consider from a members’ perspective what communication members will receive and when.

Other areas for improvement included:

• providing consistent messaging about performance across the fund website;
• ensuring that communications about short-term performance, products and mergers are balanced and don’t undermine the fact that the product failed the test; and
• providing clear call-centre transcripts for staff to discuss the performance failure or product closure and related options with members.

Prior to the review, ASIC wrote to the trustees that appeared likely to fail a second time, and set out expectations about updating product disclosure statements and issuing significant event notices. ASIC observed that trustees interpreted these obligations differently and provided feedback to them on this and other areas for improvement.

Trustees and products that failed the 2022 performance test: