Super funds demand explicit limit on AFCA

Mike Taylor

Managing Editor/Publisher, Financial Newswire

4 May 2023

Superannuation funds are strongly welcoming proposed changes to the Australian Financial Complaints Authority (AFCA) rules which specifically exclude awarding compensation for non-financial loss in superannuation complaints.

The Association of Superannuation Funds of Australia (ASFA) representing both industry and retail superannuation funds has used a submission to an AFCA consultation to make clear that superannuation funds want no ambiguity around the non-financial loss issue.

In doing so, it pointed to what it believed represented ambiguity in the latest version of AFCA’s approach which was published in October last year.

It said that AFCA’s published approach contained “wording suggesting there could potentially be situations in which AFCA could, in determining a superannuation complaint, include compensation for non-financial loss.”

“Given AFCA’s Rules prohibit it from awarding compensation for non-financial loss in superannuation complaints, ASFA is of the view the wording in the current version of the Approach may cause confusion and create (or contribute to) unrealistic expectations for a complainant in terms of the potential outcome of their complaint,” the ASFA submission said.

“On this basis, we strongly support the revised wording contained in the proposed amended Approach, which includes the very clear statement that: ‘AFCA cannot award compensation for non-financial loss in superannuation complaints. AFCA Rule D.1.4 prohibits it’.”