Mandatory service standards for super funds 'long overdue', says CPA

The government has committed to reforming the superannuation industry with the introduction of mandatory and enforceable service standards for all large APRA-regulated superannuation funds.

CPA Australia noted the reform was a welcome and necessary step taken by the government, yet was “long overdue”.

On Tuesday, the Albanese government revealed it had “taken action” to raise the bar for member service in superannuation with the introduction of mandatory and enforceable service standards for super funds, intended to strengthen the superannuation system.

According to the government, the new standards would improve the way in which funds would engage with their members and prioritise member interests.

CPA Australia’s superannuation lead, Richard Webb, said the reforms were something the professional body had been pushing and calling for.

“There are standards for other matters, but the most sensitive queries in the event of death or disability have been left out,” he said.

“Insurance and death benefits are key features of superannuation which have routinely been forgotten about. This is a welcome reform to important and necessary features of superannuation in Australia.”

The government noted it wanted to ensure the same high standards Australians expected in their investment performance in their super, also applied to member service.

The new standards were set to initially target critical areas where complaint data demonstrated the greatest need for improvement such as the timely and compassionate handling of death benefits, fair and efficient processing of insurance claims, as well as clear, respectful and accessible communications with members.

Treasurer Jim Chalmers said Treasury would work closely with consumer advocates, regulators and industry stakeholders to develop the standards and that draft standards would soon be released for public consultation.

“This reform aligns with the newly legislated objective of superannuation: to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way,” Chalmers said.

“It also complements the government’s retirement phase of super reforms and the Delivering Better Financial Outcomes package, which are about ensuring Australians receive better advice and information, improved products and greater transparency.”

Webb said expectations held by the community around the release of superannuation benefits were significantly high as death, illness or injury were serious events.

Webb added that CPA Australia was looking forward to engaging with the government to ensure the reforms were handled in a way that the community expected.

“It’s crucial that information at a time of death or disability is completely clear, with minimal delays. Sensitivity during this time is of the utmost importance,” Webb said.

“Ensuring that this process has robust service standards in place ensures that fund members know exactly what to expect from their fund – and what their fund expects from them – when one of these life changing events occurs.”