Cbus faces Senate grilling over delays in payouts, union links

Leading industry super fund Cbus has come under fire in the Senate Economics Reference Committee about continued delays in the payment of insurance to members.

Senator Andrew Bragg is leading the Senate Economics References Committee hearings.

Leading industry super fund Cbus has come under fire in a powerful Senate economics committee about continued delays in the payment of insurance payouts to members.

Senate Economics References Committee chair Andrew Bragg asked Cbus deputy chief executive Marianne Walker whether the fund was attempting to mediate with disgruntled members over delays in insurance payouts in order to “suppress information”.

Cbus is being sued by ASIC in Federal Court for alleged repeated failures in handling insurance claims. Australia’s corporate watchdog last year accused Cbus of mishandling $20m worth of death and disability claims. It alleged in some cases it took more than a year to make payments to grieving families and people with disabilities.

“My question is with the 10,000 people who, as you said, have not had their insurance claims paid quickly, I mean I’ve dealt with three of them just this week in my office,” Senator Bragg said.

“Are you wanting to have this case dealt with in mediation rather than through a court case in order to suppress some information?”

Ms Walker said Cbus had apologised to members and their loved ones over delays in payouts, taken accountability and taken steps to improve matters.

“This issue is actually subject to legal proceedings so I can’t make any further comment but I am happy to take on notice to see if there is any further information we can provide and assist you with,” Ms Walker told Senator Bragg.

“We’ve got on top of things. We’re resolving 90 per cent of impacted claims and we’re paying them compensation and we’re working with our partners to really improve the way we manage members’ claims and deliver better service.”

The Australian Prudential Regulation Authority (APRA) was asked by Senator Bragg whether Cbus chair Wayne Swan, a former federal treasurer, would pass a “fit and proper person test” to run the fund.

Senator Bragg said passing such a test required the person “had no conflict in performing duties”. “With the large transfer of capital from the super funds to the unions, is that in fact creating a conflict of interest in some cases?” Senator Bragg said. “And as we’ve heard … there are some funds that have governance problems where they are not making payments, which are consistent with their best financial interest duties.”

Cbus paid the CFMEU $912,500 last financial year, including amounts for rent, utilities and a renewable energy project.

Originally published as Cbus faces Senate grilling over delays in payouts, union links