ASIC 'losing patience' with super funds over retirement services
The Corporate Regulator wants to see "meaningful improvements" in the way funds provide services to members for retirement.
ASIC's enforcement work this year will continue to focus on ensuring that super funds are creating better retirement outcomes and member services, the corporate regulator has warned in a speech at the Conexus Institute Retirement conference on 14 August.
ASIC Commissioner Simone Constant said the corporate regulator will adopt a stronger focus towards improved retirement outcomes and member services.
ASIC believe funds need to be transparent, accountable and member-focused in how they consistently deliver for Australians before and during retirement, said Constant.
In her speech, Constant said ASIC’s core objective is to drive confident and informed participation in the economy for investors, consumers and superannuation members.
ASIC wants a clearer focus on better retirement outcomes and member services to ensure all Australians are confident in their super, she stated.
“When we think about adding another three million Australians to the six million already in retirement by 2033, we realise we are facing a historic challenge in how to enable confident and informed participation in the population,” she said.
Constant said superannuation is an important concern for everyone and funds need to be more proactive in connecting with their members.
“You are the stewards of $2.7 trillion in superannuation savings, which grows every day,” Constant said.
“You are the driving force in the increasing privatisation of our markets, which as we saw through ASIC’s recent market cleanliness work, may have implications for transparency and market integrity.”
ASIC and APRA understand Australians want more clarity from regulators on how to “meet this challenge.”
The regulator suggested that superannuation funds become more informed by familiarising themselves with the data they already have access to, rather than being concerned about accessing more data.
Understanding available data and insights comprehensively will enable funds to help their customers more effectively, Constant said.
“Customers increasingly expect the businesses they deal with to anticipate and accommodate their needs,” she said.
Constant warned that ASIC is “losing patience” when it comes to complaint handling and believes super funds can be doing more for their members.
“We are particularly concerned about delays in processing death benefits claims, where complaints tripled over the same period,” she said.
“The first phase of our recent surveillance found that trustees can be doing more to help members understand, put in place and update death benefit nominations,”
“Ask whether you are proactively and regularly engaging with your members on this.”
ASIC also thinks there needs to be more accountability for members from the trustee board down.
Constant said some funds have already set up retirement focused leadership roles and teams but this needs to continue beyond the executive level.
“You need the right people, at the right levels, who are empowered to make good member and good retirement outcomes a priority,” she said.
“Boards of trustees need the right skills and reporting structures to oversee and deliver retirement income strategies as well as the delivery of consistent and fair member services more broadly.”
Constant said that ASIC will not dictate what members a board has, however, participants must deliver to the standards super members expect in a measurable and meaningful way.
Super funds have been advised to map their members journeys as superannuation is the most important investment held by most Australians.
ASIC want to see more members constructively engage with their super wealth and super fund, according to Constant.
“It’s clear Australians want better information to help guide them through the financial milestones of life,” she said.
“Transparency, accountability, consistency: where laws fall short of these expectations, ASIC will and must bring the full force and effect of the law.”
