Super funds risk ASIC conduct charges over delayed payments
Financial advisers have for years complained about the time taken by industry superannuation funds to undertake transfers, and now the Australian Securities and Investments Commission (ASIC) has confirmed it is seriously scrutinising superannuation funds on the time taken around death benefits.
In fact, ASIC has stated that it views the delayed payment of death benefits by some superannuation funds as a “conduct issue” on the part of those funds, opening up the prospect of significant penalties.
The regulator has expressed concern at reports that some death benefit payments have been delayed by up to two years and then noted that it was a theme confirmed by complaints filed with the Australian Financial Complaints Authority (AFCA).
Specifically asked about reports that some superannuation funds were taking more than a year to facilitate death benefit payments, ASIC told Senate Estimates that it was prioritising getting to the bottom of the delays.
“Are you referring to delays about payments by superannuation trustees to their members?” ASIC deputy chair, Sarah Court, asked in response to Senate committee questioning.
“That is a matter we are very aware of. There have been several media reports recently about those failures and some of the themes are processing delays up to two years and poor communications by the trustee with members.
“We are also aware there are high number of AFCA complaints around those as well and we think they are conduct issues on the part of superannuation trustees and we are prioritising that in the next little while,” Court said.
Asked about an instance of a Tasmanian man being asked by a superannuation fund to obtain a second death certificate for his wife, Court said that ASIC was aware of the report and that it reflected an emerging theme of complaints being filed with AFCA in relation to the way members claims were being processed.
Asked how long it would take ASIC to take action on the issues, Court said it was being prioritised and that the regulator might be in a position to provide an update the next time it appeared before the Senate Committee.
“This has been elevated to be a priority issue for us,” she said.
ASIC yet again knowing for a long time about significant problems and doing NOTHING about it.
Of course it’s Industry Super, so a discussion over beers at the MCG Industry Super corporate box will keep ASIC placated for years more.
We all know ASIC are corrupt and on the payroll of these Super funds. This issue of incompetence has been around for “decades”. ASIC have deliberately chosen to turn a blind eye to it due to the incentives on offer.
Typical Industry Super funds and not-for-profits will take 8-18 months to pay out monies upon death. Even with Binding death nominations in place. Meanwhile, after speaking to Widows at their wit’s end and crying in our officers, when Advisers suggest alternatives to the next client we’re treated like criminals.
Been happening for years ASIC, where have you been??
Watching River Fire with Sunsuper and Melbourne Storm with Host Plus.
I personally just had a retail insurer approve a death claim that is 5x the amount of the deceased’s superannuation death benefit. Still waiting on Australian Super to approve the superannuation death benefit to the binding nomination/spouse.
When the bulk of your assets are in illiquid unlisted funds, it could be a bit harder to handle withdrawals etc…so that would explain rollovers being delayed, BUT INURANCE?? Must have something to do with either self insuring members or trying to keep claims down so that premiums remain cheaper that year…??