Super in limbo danger

Lawyers warn of dispute body gridlock

THOUSANDS of Australians could see their superannuation locked up in long-running legal wrangles after the Federal Government halved funding to the body that handles retirement savings disputes.

Lawyers have raised the alarm over plans to channel complaints to the “one stop shop” Australian Financial Complaints Authority, unveiled in last month’s Budget.

The Superannuation Complaints Tribunal will quickly see its funding drained as the government transfers disputes to the new authority.

For the financial year about to finish, the tribunal had a $10.4 million budget to help clear a backlog of cases. Its budget for the coming financial year has been cut to $5.2 million.

Federal Budget documents reveal funds being tipped into the new body will be “offset by a reduction of funding of $7.2 million over four years from 2017-18 associated with the Superannuation Complaints Tribunal being wound down”.

It says the tribunal will no longer be operating from July 1, 2020.

The financial services industry will fund the new authority, which will combine the Superannuation Complaints Tribunal, the Financial Ombudsman Service and the Credit and Investments Ombudsman.

Any company with a financial services licence will have to be a member of the new body whose decisions will be binding.

The Superannuation Complaints Tribunal has been the principal authority for ruling on disputes.

John Berrill, principal at lawyers Berrill & Watson, said the super tribunal risked being burdened by a far bigger backlog of cases as its funding was halved this year, with more to be cut next year.

Last year, Business Daily revealed thousands of Australians had their retirement savings trapped in bureaucratic limbo amid a glut of disputes at the existing tribunal.

Mr Berrill said there was a danger that when the new authority was launched, it would face a deluge of old super cases.

If cases were not passed to the authority, the super tribunal would struggle to process all its cases by the 2020 deadline, he said.