Watchdog Slams Australian Pension Funds’ Treatment of Customers
(Bloomberg) — Australia’s regulator has slammed leaders of the country’s pensions industry for overseeing a culture of poor customer service following a review into excessive delays in handling death benefit claims.
The Australian Securities & Investments Commission detailed a litany of failures in industry practices in a report Monday. ASIC has already filed lawsuits against AustralianSuper, the nation’s largest pension, and Cbus, over lengthy delays in processing claims for grieving families when loved ones have died.
A death benefit is the amount of savings left in an account when a person dies, and there may also be proceeds from insurance. In one case, a fund took more than 500 days to pay a death benefit of around A$100,000 ($63,000) to an Indigenous woman after the death of her husband, ASIC said.
“At the heart of this issue is leadership that doesn’t have a grip on the fund’s data, systems and processes – and ultimately it is the customers who suffer for it,” ASIC Chair Joe Longo said in a statement. “This kind of disconnect is unacceptable in any area of corporate Australia, but in the superannuation sector it is particularly serious, because super affects everyone from the boardroom to the living room.”
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Australia’s A$4.2 trillion pension system is facing increased scrutiny over mounting concerns about customer service. ASIC’s review looked at the processes of 10 of the biggest pension funds, outside of the two it’s already suing, and identified issues including “excessive delays, poor customer service and ineffective claims handling procedures.”
The report makes 34 recommendations for improvements, including faster response times and improved monitoring and reporting.
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