ASIC tells bad super funds to step up

THE corporate regulator is threatening enforcement action against superannuation funds that have “serious deficiencies” in their handling of complaints and disputes.

The Australian Securities & Investments Commission on Friday released a review of superannuation trustee compliance with complaints handling requirements that found some trustees had “substandard arrangements”.

ASIC’s findings relating to super trustees’ internal dispute resolution arrangements were revealed this week, prompting Financial Services Minister Stephen Jones to suggest it was a “wake-up call” for the $3.3tn industry.

ASIC commissioner Danielle Press said while some super funds were meeting the requirements, many had fallen short of their legal obligations.

“We saw examples of trustees’ failure to comply with fundamental obligations, which could lead to poor outcomes, such as consumers abandoning a complaint rather than seeing it through,” Ms Press said. “While a few trustees did the right thing, in many cases there were serious deficiencies.”

ASIC selected 35 trustees for an initial review, followed

by a more detailed review of a subset of 10. The regulator did not name the trustees or funds

but said it canvassed a mix of industry, retail, public sector and corporate funds.

The report found there “were gaps” in how most trustees managed systemic issues that they could have identified through appropriate handling of member complaints.

It said after assessing information provided by 10 trustees in the second stage, it found half had clearly nominated

who was accountable for serious issues identified in complaints. Only two of 10 trustees had “relevant metrics” and

were proactive in analysing data to identify, manage and remediate systemic issues.