Super: Vita Palestrant
Super fund members will benefit from a new one-stop shop for financial complaints
In an ideal world everything runs smoothly and pans out just as you expect it to. But in the real world things can and do go wrong. What, then, do you do if your super fund has miscalculated a benefit, dragged its heels making a payment or refused a disability benefit?
If you are a member of a regulated super fund you can lodge a complaint with the industry’s external dispute resolution scheme, the Superannuation Complaints Tribunal (SCT). Its service is free and its determinations are binding.
But before you go down that route, you need to give your fund the opportunity to fix the problem. That means calling or writing to its internal complaints division outlining the complaint. The fund has 90 days to respond. If the outcome is unsatisfactory, go to the SCT.
“All super funds, by law, are required to have internal dispute processes. It’s often quicker and easier to get a good outcome this way,” says Gerard Brody, CEO of the Consumer Action Law Centre. “If that option doesn’t resolve your complaint then you have the right to go to external dispute resolution. Currently that is the SCT but that will change to the Australian Financial Complaints Authority from November this year.”
To take your complaint to the scheme you need to fill in a form outlining the details: why you think your fund’s decision is unfair, any consequences or loss you’ve suffered and the outcome you are after. Brody says generally super funds hold most of the relevant documentation so the onus is on them to provide the information to the dispute forum.
Consumer advocates have long supported the creation of a one-stop shop for financial complaints. They say AFCA will be more user friendly and efficient. In addition, the corporate watchdog, ASIC, will get early warnings on systemic issues that arise in the sector. AFCA will replace three existing schemes – the SCT, the
Financial Ombudsman Service and the Credit and Investments
Ombudsman – and commence operating on November 1.
Helen Davis, says it will work towards a smooth transition, “which is essential for current and future complainants”. It will accept complaints until October 31 and then continue operating beyond that date to resolve existing complaints.
Fiona Guthrie, CEO of Financial Counselling Australia, says the SCT will adopt the principles of existing schemes of accessibility, independence and fairness. “FCA and other consumer organisations have supported a one-stop shop dispute-resolution body. Having super disputes as part of that is a positive step. The current SCT has huge delays and with the new funding model they may not be starved of resources in the way they have been in the past.”
Brody agrees. “The primary benefit for fund members is that AFCA should be better resourced to resolve disputes more quickly. With the SCT at the moment it can take two, even three, years for a dispute to go through the process to become a determination.
“That’s because it hasn’t been funded that well under the government. Now, under AFCA, the industry pays for the cost of dispute resolution. There will be a fee associated with every complaint from the user-pays system. That way, if there are a lot of complaints, it will still be sufficiently resourced to do its job.”
It also provides super funds with an incentive to resolve complaints internally rather than leave disgruntled fund members to seek redress externally. In the wake of the royal commission that is good news indeed.