The Australian government has initiated a crackdown on subpar member services in the superannuation sector, particularly focusing on delays in processing death benefits and insurance claims. Treasurer Jim Chalmers and Minister for Financial Services Stephen Jones announced the introduction of new mandatory industry standards to address these issues.
The government aims to ensure that superannuation funds provide high-quality services that meet or exceed community expectations, especially during sensitive moments in members’ lives. The upcoming standards will prioritize timely handling of death benefits, efficient processing of insurance claims, and improved member communications across all large APRA-regulated superannuation funds.
This crackdown follows legal action against Cbus, a major profit-to-member super fund, by ASIC for alleged failures in processing insurance claims. Cbus faced accusations of prolonged delays in resolving TPD and death benefits, resulting in financial losses for members and claimants. Subsequently, AustralianSuper launched a compensation program to address delayed claims, emphasizing the importance of improving member experience in the superannuation industry.
Research conducted by Conexus Financial and CoreData revealed low levels of satisfaction with customer service among superannuation fund members, indicating a need for enhanced service quality. The industry has faced challenges in differentiating purely based on performance, making service excellence increasingly vital in recent years.
Critics, including Senator Andrew Bragg, have advocated for stricter timelines on processing superannuation insurance claims, urging for mandatory deadlines to be imposed. While the specifics of the Labor government’s standards are yet to be disclosed, consumer advocacy groups are pushing for clear timeframes to ensure efficient claims processing.
Super Consumers Australia CEO Xavier O’Halloran welcomed the government’s move towards establishing mandatory industry standards, emphasizing the importance of accountability and improved consumer confidence in the superannuation system. Industry association ASFA also expressed support for the scrutiny, highlighting ongoing efforts by funds to enhance member outcomes through internal process improvements.
The superannuation sector faces evolving regulatory pressures and consumer expectations, driving the need for robust member service standards and streamlined claims handling processes. As the industry strives to elevate service quality and transparency, the implementation of these new standards is poised to reshape the landscape of superannuation operations, ensuring better outcomes for fund members and beneficiaries.
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