Heartless super funds treat customers like ‘rubbish’

Super funds have issued a grovelling apology after a bombshell report found it made some grieving customers wait 500 days for death benefit payouts.

Australia’s super funds have been accused of treating their customers like “rubbish” as a landmark report lashes their handling of death benefit payouts.

The national business watchdog will on Monday release a scathing assessment of funds including Hesta, Hostplus, and UniSuper, with relatives of customers waiting up to 500 days for a payout on a death benefit.

The Australian Securities and Investments Commission report examined the claims handling of 10 major funds who hold about 40 per cent of the nation’s superannuation accounts.

Investigators found four in five super funds had delays that were caused by their processing systems.

The report also uncovered “poor service” as well as “insensitive” communications to the grieving relatives of customers.

ASIC Commissioner Simone Constant has demanded super funds improve their service. John –/The Australian.

Financial counsellor Alan Gray said the report confirmed what he had seen from decades helping distressed clients.

“Super funds take your money but never cough it up when you’re in trouble. They are laughing behind their hands at the entire Australian population,” he said.

“There’s been a total lack of oversight by successive governments that have allowed the funds to treat its members like rubbish.”

The report also covered Australian Retirement Trust, Colonial First State, Brighter Super, Commonwealth Superannuation Corporation, NM Super (AMP), Nulis (MLC) and Rest.

The ASIC report hit the super funds with 34 recommendations to improve their woeful treatment of the grieving families of their customers.

The watchdog’s demands included faster response times and better customer service as well as streamlined processes.

The peak body for superannuation funds issued an apology in response to ASIC report, saying funds have to do better.

The bombshell ASIC report also detailed the case of a First Nations woman who waited 500 days for a $100,000 death benefit for her husband to be approved.

The woman, who was included in the report on the basis of anonymity, had told the super fund that she was in financial hardship.

Financial counsellor Alan Gray.

Mr Gray, who is based in Broome, Western Australia, and helps First Nations customers in remote communities, said super funds were hypocritical.

“For all the talk about reconciliation, in all my years here I haven’t seen the treatment of Aboriginal people get any better,” he said.

The poor service, red tape and delays for customers are in stark contrast to the glitzy ads for the Industry Super Funds, which includes Hostplus and Hesta, that use Ben Lee’s song ‘We’re all in this together’.

Hesta was among the firms included in the ASIC report.

ASIC Commissioner Simone Constant said: “Grieving Australians should not have to suffer further stress because of the failure of superannuation trustees to approach claims in a timely, clear, and respectful manner.

“Trustees have not put in place meaningful performance objectives, tracking or reporting, and have failed to approach claims handling with consumers front of mind.”

The Association of Superannuation Funds of Australia chief executive Mary Delahunty said: “The superannuation sector knows we have let down some of our members and their families at a time they needed us, and we are sorry.

“While the majority of our members and their families have a seamless experience with death

benefits claims, we know we need to do better to make sure this is the experience of as many

people as possible.”

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Originally published as Heartless super funds treat customers like ‘rubbish’