HESTA ‘struggling to cope with complaints’ as its administrative switch turned back on

Industry fund HESTA has switched on its new administrator and immediately copped the ire of customers who were locked out for seven weeks and now find themselves in hours-long phone queues.

HESTA has changed administrators from MUFG Retirement Solutions to GROW Inc but the fund is already struggling to deal with calls and complaints.

Industry super fund HESTA is in fresh strife over substandard administrative services following a shutdown that locked members out of their accounts for two months.

The $93bn super fund for healthcare workers locked its 1.1 million members out of their accounts between mid April and early June, using that seven weeks to switch administrators from scandal-plagued MUFG Retirement Solutions to GROW Inc so it could deliver better services.

But since restoring services on June 2, HESTA and its new administrator have been overwhelmed, whereby members have experienced hours-long call waiting times over the past week as well as delays in basic administrative services, including processing payments. The fund reopening has been so disorganised that, in some instances, call centre staff were unable to identify accounts when speaking to members.

Others have reported issues with income stream accounts, while there have been numerous complaints that urgent payment requests submitted through the lockdown period were excessively delayed.

The administrative issues come after a year of member service scandals in the $4 trillion super industry, such as the excessive delays to paying out death and disability claims and a cybersecurity breach during which money was stolen from a handful of AustralianSuper members, including one elderly woman who had $406,000 taken from her account.

At the centre of nearly all of the scandals stands MUFG Retirement Solutions, formerly Link Group, which a number of the major funds such as AustralianSuper, Rest Super, Cbus, Hostplus and HESTA used for their administrative services. Like HESTA, AustralianSuper has worked to distance itself from MUFG. AustralianSuper has moved the bulk of its services in-house in the past 18 months.

HESTA was heavily criticised in April over its poor communications to members in the lead-up to the seven-week shutdown, which occurred right as markets were in free fall following Donald Trump’s “Liberation Day” tariffs. Some members only realised they were locked out of their accounts when they attempted to log in.

Super Consumers Australia chief executive Xavier O’Halloran.

Members and consumer groups tore into the fund again between April and June for failing to deal with urgent payment requests over the seven weeks as members desperately tried to access their funds for payments such as house and car deposits.

Although sources told The Australian the fund was dealing with high volumes of requests from members wanting to switch to other funds, HESTA denied this, saying “rollovers remain broadly in line with the corresponding period last year”.

“We’ve actioned the rollover requests received since the limited services period began and are currently processing new rollover requests,” a spokesman said.

The spokesman also said processing delays had been flagged to members ahead of the fund resuming services.

“The transition to GROW Inc was one of the largest and most comprehensive projects seen by an Australian industry super fund, with over one million members transitioned and more than a decade’s worth of data,” the spokesman told The Australian.

“We are working hard to support members and apologise to any members whose experience hasn’t met expectations.”

But Super Consumers Australia chief executive Xavier O’Halloran said HESTA response wasn’t good enough, with the fund knowing well in advance that it would be dealing with higher member query volumes in the days after reopening.

“It was pretty clear there would be a huge increase in demand at the end of the shutdown period, and clearly they haven’t planned well enough to meet that,” Mr O’Halloran told The Australian.

“It’s really not good enough from HESTA that people are still waiting in call centre queues to get access to their money and manage their super.”

Originally published as HESTA ‘struggling to cope with complaints’ as its administrative switch turned back on