Major Super Funds Failing Grieving Members, ASIC Finds

ASIC has exposed widespread failings by Australia’s largest superannuation funds, revealing they’ve acted unfairly and insensitively towards grieving members.

Not a single trustee reviewed tracked or reported on the full end-to-end process of handling death benefit claims.

The review, which included major names like Australian Retirement Trust, HESTA, Hostplus, Rest, AMP, and UniSuper, found systemic delays, poor customer service, and shocking gaps in data and oversight.

Key findings include:

– 78% of delays were due to internal processing failures.

– 27% of cases involved poor service such as ignored calls or queries.

– 17% of claimants were vulnerable, yet one-third of those were mishandled.

– One trustee took over 500 days to pay a $100,000 death benefit to a First Nations woman.

ASIC slammed the funds for having no meaningful performance tracking, leaving families in distress at the very time they most need support. The regulator has issued 34 urgent recommendations to address these failings.

ASIC Chair Joe Longo called on industry leaders to take ownership of the problems and flex their muscle to fix the failings.

‘This 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.

‘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.

‘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.’