obÌåÓý

Check against delivery

I would like to begin by acknowledging the Kaurna People’s ongoing connection to and custodianship of the lands on which we meet and paying my respects to Elders past and present. I extend that respect to Aboriginal and Torres Strait Islander people present in the room, as well as online.

I also recognise the distinct challenges faced by First Nations� superannuation members and claimants, and reaffirm our commitment to driving meaningful change, for them and with them.

It’s an honour to be here this evening to reflect on the privilege and responsibility that superannuation trustees� have in managing Australians� retirement savings.

I acknowledge the many distinguished guests in the room and online, including my fellow obÌåÓý Commissioner Alan Kirkland, who has promised not to heckle.

Ladies and gentleman, superannuation is often lauded as one of Australia’s greatest success stories.

What began as a fringe benefit has become the largest source of wealth for many Australians, outside of their family home. It has lifted living standards in retirement for millions of people and positioned Australia as a growing global player in capital markets.

It’s amazing when you stop to think about it. Australia has only the 55^th largest population, yet we now have the fourth largest pool of retirement savings in the world.

Indeed, we’re on track to surpass the UK and Canada by the end of the decade as the second largest system globally^[1].

In the past decade alone, Australia’s total superannuation assets have more than doubled to nearly $4.2 trillion funds under management, including $2.9 trillion in APRA-regulated funds^[2].

Put simply, our super is growing faster than our economy, at around 160%^[3] of GDP � and is now larger than the market capitalisation of the ASX^[4].

But as many people here and online will know, that’s not the whole story. Bigger has not necessarily meant better when it comes to the way superannuation trustees treat their members � their customers.

I want to tell you a story of a woman I’ll call Margaret � although that is not her real name.

Margaret’s husband of 20 years recently died after a long battle with cancer.

Through his super fund, he had a death benefit of more than $600,000 owing. Before he died, he had jumped through all the right hoops and made a valid binding nomination in favour of his wife, with no other dependents.

However, despite his clear wishes, it took nearly a year for Margaret to receive her husband’s money.

She got the runaround at every turn. She was asked to provide the same documents over and over, and she was ghosted by her husband’s fund when asking for information. All while navigating the grief of losing her spouse of two decades.

Our work on superannuation death benefits claim handling failures has sadly uncovered more stories like Margaret’s.

A husband about to lose his home, while his wife’s death benefits claim is delayed due to onerous claims staking.

Mothers blocked by bureaucracy when trying to settle their sons� affairs.

Some of these stories have come to us through the hard work of financial counsellors and consumer law advocates, and for that, I want to thank them � I want to thank you � here tonight.

These stories � these people � should not be lost among all the successes of super.

Super trustees have done a remarkable job at building wealth for Australians, but they have a lot more work to do when it comes to paying it out.

You see, the success of our entire superannuation system is built on the trust of Australians.

Trust that their money is in safe hands. Trust that their money will be there for them when they need it. And trust that their money will look after the people they love if they’re not around to enjoy it.

Every time a partner has to plead for basic information, or a parent has to resubmit documentation, that trust is eroded.

Death benefits

So, what’s obÌåÓý doing about it?

Our role is to promote confident and informed participation in our financial system.

Superannuation is one of the most � if not the most significant � parts of that system, so it’s a significant focus for us.

We have a multi-year project underway to drive a step-change in the way trustees are delivering member services � and our Chair will soon be announcing the next phase of that.

But our first priority was to look at death benefits claim handling � and the data shows why.

Between 2021 and 2023, complaints to AFCA about death benefits claims handling delays tripled as a proportion of superannuation service complaints. Then in early 2023, super trustees� internal dispute resolution data showed a spike in death benefits complaints^[5].

Over the past two years, we have been working to get to the bottom of these issues. Along the way, we’ve published articles highlighting good and bad practices across the industry.

Where we’ve found failures, we’ve written to trustees calling for action. And when we’ve found serious failures, we’ve taken serious action.

As you are likely aware, we currently have two of Australia’s largest superannuation funds, AustralianSuper and Cbus, in court for significant claims handling delays.

Out of respect for these processes, I’m limited in what I can say about these cases tonight. But as we stated at the time, these matters are about protecting vulnerable Australians and their families.

The apex of this work in March was a roadmap to trustees to help them lift their game. Thirty-four recommendations to industry to support better customer service, better processes, and better monitoring.

The feedback from industry has been promising. Even as our review was ongoing, it prompted many trustees to improve their practices and complaints were falling.

But we’re not done with death benefits. We will continue to follow up and follow through to ensure trustees do what they have said they will do and deliver that step-change that has been promised.

Governance � the golden thread

As we look across the scale of the superannuation sector and focus on issues of conduct, there’s some areas that stand out to us as requiring improvement.

This includes increasing confidence that trustees are learning from, and responding to, complaints and incidents; member experience during and in the period following mergers; as well as the quality of member interaction, in particular in call centres.

A golden thread running through these issues seems to be a disconnect between what’s happening in the boardroom and in the bullpen.

When I talk to trustees, they always say that their organisation works for the best outcomes for their members. But my first question to them is � how do you know? How are you measuring that? What data are you using? What are you doing with your complaints data? And when things go wrong, what question didn’t you ask?

Oversight starts with insight. It speaks volumes that not one trustee in our death benefits review tracked their claims handling times from start to finish. It’s no wonder that some of them were shocked when we showed them their processing times.

To do their jobs effectively, trustees need the right data and the right insights � and they need it regardless of whether their services are delivered in-house or outsourced. Without it, how can they say, hand on heart, that they’re meeting their obligations?

This is a trend we have observed in other areas of practice as well. For example, in January, we wrote to trustees with concerns that they were too reliant on their external administrators� anti-scam and anti-fraud practices. Since then, we’ve seen several funds targeted by cyber criminals, with hundreds of thousands of dollars of members� money stolen^[6].

But there’s another missed opportunity I’d like to highlight in this forum tonight too.

Trustees were also surprised when we read to them from their own complaint files.

Now, we see complaints as the canary in the coal mine. Complaints aren’t just an opportunity to course-correct in individual cases. They’re an early warning system for serious, systemic issues. It’s also, of course, an enforceable requirement (RG 271) to regularly analyse complaint data to identify systemic issues.

To be clear, we don’t expect trustees to look every single complaint, but they can’t exist in a vacuum. To get it right, they have to understand what’s going wrong.

I think a really powerful way to do that is by listening to some of their customer calls. Now, we certainly did and it was heartbreaking. People struggling to pay their bills, having to tell their stories over and over, and feeling forced to complain to access what is in fact their money.

One of the key findings of our review of death claim files was that 78% had delays due to factors that were actually within the trustee’s control � so that’s within the trustees gift to fix. This included things like staff errors, periods of inaction, and inefficient requests for information. I suspect that number would be far smaller if these boards heard what we heard.

One of our key messages to trustees recently has been to know your business and reassure yourselves that you are meeting your obligations.

This kind of information disconnect is going to be of continued interest to us, particularly with the extension of the Financial Accountability Regime (FAR) to superannuation trustees this year.

You can expect to hear more from us soon in this regard as we look to play our part in a new era of accountability for super trustees and help to restore some of the trust tarnished in recent times.

Conclusion

So I’d like to leave you with a bit of hope in the room. I’d like to leave you with a story tonight which shows that change is possible and is happening already.

Early in our death benefits review, we heard from a financial counsellor about a First Nations woman I’ll call Anna, who she was helping to claim her husband’s death benefits from three different super funds. Unfortunately, Anna had poor experiences with every single one of them.

For example, Anna and her husband were tribally married � but claims staff kept asking her for a marriage certificate which didn’t exist.

Then they asked her for evidence of shared bills. But Anna lived in a remote community where there are no bills � people prepay their power with a power card and rent is deducted from bank accounts or Centrelink payments.

There were also long periods of time when the financial counsellor didn’t get any response at all to her queries, and she had to make a complaint to see progress on the claims.

Now, the hope in the room. Some of the trustees Anna had made a claim to were part of our review � so we talked to them about Anna’s experience and how they could improve.

I’m pleased to say those trustees have since taken concrete steps to improve the way they engage with First Nations members and claimants going forward and Anna did get the money she was entitled to.

But also, her willingness to share her story has meant a number of trustees better understand the barriers First Nations people are faced with when living in rural, regional and remote Australia, and are taking steps to do right thing in supporting people in those circumstances.

My final message to you tonight is to keep lifting those voices and helping your clients be heard. Change comes step by step, or as I like to say, story by story.

At obÌåÓý, we’ll continue to do our job of driving trustees to do theirs. Of pushing for transparency, consistency, and accountability. So that the success of superannuation can be measured by the quality of its services, not just by the size of its funds under management.

Thank you again to the consumer advocates and financial counsellors who engage with obÌåÓý, and of course to the Law Council for having me here tonight.

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^[5] Improving superannuation member services � Dealing with death benefit claims

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