The trustees of big superannuation funds have been warned to prepare for regulators to come after them in court this year if they do not lift their game on customer service and how they use members’ money for administration, advertising and payments to unions.
Treasury this week was tasked with drafting mandatory service standards for superannuation that will be backed by regulation, after repeated episodes of poor service including the slow payment of death benefits and other insurance claims.
ASIC commissioner Simone Constant told The Australian Financial Review a focus for the regulator this year would be on getting funds to treat their members more like customers, with the service and transparency that requires – or risk court action.
“If I were to give one clear message from us, from this past year, to trustees, it would be that you are trustees to members of your funds, but you need to see them and engage them as customers,” she said.
Delays in claims handling were the most complained-about issue to AFCA last financial year, followed by errors in account administration – another area where funds were heavily criticised for outsourcing services in 2024 – and poor service quality.
The corporate and prudential watchdogs say they will prosecute any superannuation funds still failing to meet basic customer service or governance standards this year, as pressure grows on the $4.1 trillion sector to show the maturity of other financial institutions of their size.
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