Super funds urge 60 days on breach report handling

Superannuation funds have told the Australian Securities and Investments Commission (ASIC) that while they welcome proposed changes to breach reporting arrangements, they do not go far enough.

The Association of Superannuation Funds of Australia (ASFA) has responded to the ASIC proposals by arguing that the relief period of 30 days is not enough and should be extended to 60 days.

It said the current proposals outlined by ASIC did not provide sufficient timeframes for rectification and remediation stating that, for example, “some rectification situations can take a longer period to identify the relevant issues and ensure members are compensated in the fairest manner”.

“This can be the case even in relatively minor matters, as members have tax consequences for any remediation decisions taken,” it said.

“ASFA recommends the relevant sections related to the temporal element should be amended so that the proposed period for relief is changed form 30 days to 60 days,” it said.

It said that if the 60-day period for rectification is not adopted then, alternatively, the timeframe should align to those within ASIC’s RG 271 dealing with internal dispute resolution.

“RG 271 provides specific exceptions to the general obligation that a financial firm must provide an internal dispute resolution response to a complainant no later than 30 calendar days after receiving the complaint.,” it said. “For superannuation trustee complaints (except for complaints about death benefit distributions which provides a longer period), the maximum timeframe is no later than 45 calendar days after receiving the complaint.”

“ASFA considers that this 45-day period may provide more significant relief, and importantly, would help to align regulator timeframes across instruments, reducing compliance costs overall.”

“If neither of recommendations 3 or 4 are accepted, ASFA recommends in the alternative that ASIC consider splitting the timeframes for reportable situations that include a financial element to be rectified from those that are only non-financial in nature,” it said

“Non-financial situations may be quickly and rectified within a 30-day timeframe. Financial situations could be extended to the 60 or 45-day timeframe in recommendations 3 and 4, to allow adequate time to analyse and financially re-compensate members as necessary.”