Following a 2 year assessment of death benefit claims handled by 10 superannuation trustees, The Australian Securities and Investments Commission (ASIC) has issued ‘Report 806: Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve’.
In its report, ASIC highlighted key issues in how superannuation trustees handled death benefit claims. ASIC made specific mention of:
- significant variation in end-to-end handling times between superannuation trustees;
- gaps in data and reporting;
- lack of clarity and inconsistencies in policies and procedure;
- ineffective and insensitive communications; and
- a lack of support for First Nations claimants.
ASIC has also made 34 recommendations to address the above-mentioned issues, which broadly fit within the following categories:
Governance and oversight
ASIC has encouraged trustees to better understand and measure their claims handling and complaints (with metrics such as end-to-end claims handling times), to use that information to proactively identify and address issues (such as deficiencies in their service providers or general resourcing), and provide that information to their boards.
Policies and procedures
ASIC has recommended that trustees have documents which are clear and consistent in setting out processes and procedures to make valid nominations, handle death benefit claims, and address any complaints (in respect of either the trustee or any of the service providers). Policies and procedures should appropriately balance the trustee’s risk appetite with service (including addressing any AML/CTF obligations). Policies and procedures should also be proactively reviewed to ensure that they address significant business developments, such as a merger.
Communication
ASIC has recommended that trustees should clearly, compassionately, and effectively communicate with claimants by, for example, ensuring that claims packs are readily understood and request only necessary information and material; claims communications are regular, in plain English, and identify and address the needs of vulnerable customers; and complaint responses comply with RG 271 as well as include a real apology (if an apology is required).
Support for First Nations claimants
ASIC has set out its view that trustees should take additional care and effort to identify First Nations membership of their funds and ensure that policies and procedures address the needs of First Nations people.
The complete report can be accessed here.
If there is anything identified in the report which we can assist you with, please do not hesitate to contact us.
This article was written by Nicholas Matkovich, Partner and Vignesh Iyer, Senior Associate.
