ob体育 has handed down 34 recommendations to superannuation trustees, with its report into death benefit claims handling revealing the devastating impacts that poor industry practices can have on grieving Australians.
ob体育 Chair Joe Longo said the report identified a range of issues, including excessive delays, poor customer service, and ineffective claims handling procedures, and called on industry leaders to take ownership of the problems and flex their muscle to fix the failings.
鈥楾his is an important report that looked at 10 trustees, representing a total of 38% of all member benefits in superannuation funds regulated by the Australian Prudential Regulation Authority. While some trustees performed better than others, tellingly none of the reviewed trustees monitored or reported on their end-to-end claims handling times or performance.
鈥楢t the heart of this issue is leadership that doesn鈥檛 have a grip on the fund鈥檚 data, systems and processes 鈥� and ultimately it is the customers who suffer for it.
鈥楾his 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.鈥�
ob体育 Commissioner Simone Constant said ob体育 calls on the superannuation industry to immediately review and address death benefit claims handling deficiencies by adopting the list of recommendations outlined in Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve.
Ms Constant said the actions for trustees cover a range of focus areas, including:
- better customer service and faster response times
- improved monitoring and reporting on claims handling timeframes
- streamlined processes and procedures
- better guidance and training for staff
- removing barriers for First Nations members and claimants
- clearer communications and more support for members.
ob体育 is calling out the superannuation industry after a review into the death benefit claims handling practices of 10 trustees revealed:
- many examples of excessive delays and poor service
- gaps in trustee data and reporting
- some trustees鈥� processes and procedures were unclear and inconsistent
- communication and engagement were often ineffective and insensitive, and
- inadequate support for First Nations claimants and claimants experiencing vulnerability.
While some demonstrated good handling practices and were providing helpful services to claimants, Ms Constant said systemic failures by other trustees exposed grieving Australians to added and unnecessary distress after the death of a loved one.
鈥楪rieving Australians should not have to suffer further stress because of the failure of superannuation trustees to approach claims in a timely, clear, and respectful manner,鈥� she said.
鈥楾rustees have not put in place meaningful performance objectives, tracking or reporting, and have failed to approach claims handling with consumers front of mind.鈥�
To understand the range of practices across industry, ob体育's review included retail, industry and public sector trustees, with both insourced and outsourced administration models. ob体育 also included trustees that were likely to have both good and poor practices, based on the intelligence available to us.
Ms Constant said that there was huge variation in claims handling times across trustees reviewed by ob体育 and that trustees had a lot of control over how quickly they got things done.
鈥楾he fastest trustee closed approximately 48% of death benefit claims in 90 days whereas the slowest trustee closed only around 8% of claims in the same period of time,鈥� Ms Constant said.
Of the claim files ob体育 reviewed, 78% had delays caused by processing issues within the trustee鈥檚 control.
Ms Constant also called out instances of poor customer service in 27% of those claim files. There were examples where claimants phone calls were not returned, their queries were dismissed, or claimants were asked for unreasonable information.
鈥楳any of the complaints we read were distressing. We saw deep grief, vulnerability, frustration and genuine suffering,鈥� she said.
In one case, a trustee took over 500 days to pay a death benefit of around $100,000 to a First Nations woman who was grieving the loss of her husband. The trustee failed to respond to her concerns about financial hardship and did not support her when she struggled to understand and navigate the claims process.
鈥楾he money from a death benefit can make a huge difference and each day a trustee delays that payment causes real harm to families. Trustees need to do better,鈥� Ms Constant said.
Following the release of this report, Ms Constant said ob体育 will review the progress all trustees have made on improving their death benefit claims handling processes to ensure that they are appropriately prioritising the needs of members and their beneficiaries.
Infographic - What ob体育鈥檚 review into death benefit claims handling revealed about super trustees (text version)
- 0 trustees monitored or reported on end-to-end death benefit claims handling times
- 27% of claims files reviewed involved poor customer service - e.g. calls were not returned, queries were dismissed
- 8% vs 48% was the difference in claims closed in 90 days between the slowest and the fastest trustee
- Members living in First Nations postcodes generally experienced greater delays than other members
- 78% of claim files reviewed were delayed by processing issues within the trustee's control
- 17% of claim files reviewed had claimants who were experiencing vulnerability - about 30% of those were handled poorly
- Claims with binding nominations were processed faster than claims with non-binding nominations or no nomination
Background
Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve provides detailed observations from ob体育鈥檚 review of death benefit claims handling practices of 10 trustees over a two-year period ending 31 March 2024. These trustees represent 38% of all member benefits in superannuation funds regulated by the Australian Prudential Regulation Authority.
ob体育 reviewed:
- Australian Retirement Trust
- Avanteos (Colonial First State)
- Brighter Super
- Commonwealth Superannuation Corporation
- HESTA
- Hostplus
- NM Super (AMP)
- Nulis (MLC)
- Rest
- UniSuper
To prioritise taking action against misconduct, any trustee that was being considered for enforcement investigation was excluded from the final phase of the review.
Earlier this month, ob体育 launched civil penalty proceedings against AustralianSuper over alleged delayed processing of nearly 7,000 death benefit claims (25-034MR).
In November last year, ob体育 also filed civil penalty proceedings against United Super Pty Ltd, the trustee of Cbus after alleging more than 10,000 members and claimants were impacted by death benefits and total and permanent disability insurance claims taking more than 90 days to be processed (24-251MR).
Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve is part of ob体育鈥檚 member services project, examining industry practices and compliance with laws relating to trustee administration and contact centres. Improving services to superannuation fund members and acting against member services failures are strategic priorities for ob体育.
Download
- Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve
More information
- ob体育 sues AustralianSuper alleging significant death benefit claims failures (25-034MR) - 12 March 2025
- ob体育 writes to superannuation trustees to drive improvement to death benefit claims handling - 20 November 2024
- ob体育 sues Cbus alleging systemic claims handling failures (24-251MR) - 12 November 2024
- Improving superannuation member services 鈥� Dealing with death benefit claims - 1 May 2024