A major super fund had an outage this week. Almost no one realised

This week, Australia’s second-largest super fund experienced an outage that for days halted pension payments for retirees who depend on them for critical income. Not only that, but (almost) no one uttered a word.

The company, Australian Retirement Trust (ART), didn’t make a statement and the media didn’t notice. Yet, the primary income source for about 99,200 people was interrupted and the company may still be suffering technical problems.

If a bank or major employer went down for nearly two days, it would be all over the news. But retirees continue to be invisible to the media and regulators.Credit: Dominic Lorrimer

The first inkling of an issue came from a talkback caller to 4BC in Brisbane late on Wednesday, who asked where her money was. It transpired the caller had a different, individual issue – but her call led a few other people to speak out, and that raised my curiosity. Affected members had been notified of the problem, but no one else seemed to know anything about it – no media, no trade press, no wider market awareness.

When asked to comment on Thursday, an ART spokesperson said the matter that halted all pension payments began on Monday at 11.48am and delayed pension payments to all members who were due in that fortnightly cycle; payments normally would have gone out on Tuesday and Wednesday.

Thirty-six hours later, on Wednesday afternoon, ART said it had pushed pension payments through to banks – which can take up to two days to process them, leaving some people waiting until Friday for their pension. But ART had ongoing issues – the app was down on Thursday, and voluntary drawdowns were disrupted for a short period midweek.

The company said its drawdown and payment functionalities had been fully restored and tech teams were focusing on fixing matters, but there could be continuing issues with its app over the weekend.

Imagine if a bank or a major employer with nearly 100,000 people on payroll did the same. I’m sure we’d hear about the problem in real time.

By Friday morning, the company had still not published a formal statement on the matter. It said its focus was on affected members, with some retired members reporting they’d received a two-sentence alert on the app: “Following a technology outage on Monday, there has been a delay in payments for some members of up to 36 hours. Payments have now been processed and will be paid to bank accounts within normal bank processing times. We sincerely apologise for the inconvenience.” A prompt to call was included. A short apology email was also sent to affected members.

“I didn’t receive my payment on time and was a little bit worried. I got an email apologising for the payment delay,” said Robyn Hall, an ART customer.

Most members discovered the problem only when they went looking for their missing payment. Otherwise, they’d have been none the wiser – and perhaps that’s how any company would prefer it. With no obligation to provide further information, why offer more?

Now, you might be wondering: “What’s all the fuss about?” And I get it – things go wrong; tech systems occasionally fail; hopefully not often, and they’re fixed and we forget.

But there are two issues here. First, there’s no push for scrutiny or supervision of retirement income payments, which are a growing and critical source of income. And second, the retirement phase of superannuation is almost invisible to the rest of the country, so no one notices when retirees are left empty-handed.

Usually, when something affects the primary source of income of large groups of people in Australia, the matter must be made public. Regulators start asking questions, concerned for the best interests of those affected.

What if a bank or a major employer with nearly 100,000 people on its payroll, especially one servicing younger generations, did the same thing? I’m sure we’d hear about the problem in real time, with regular updates. It’s hard to believe there are no regulations holding super funds to the same standard – and that their customers are left in the dark, with no obligation to communicate transparently.

If a bank has a major outage that affects its ability to disburse funds, it must quickly notify customers and the general public. Depending on the severity, the bank must also inform the regulator, APRA, and follow clear guidelines on how to communicate with stakeholders to ensure that consumers are not left empty-handed and uninformed.

But super funds seem to have almost complete discretion over how and when they communicate about an outage, and there’s no requirement from regulators that they report it unless they choose to.

That might have been fine when super funds were focused primarily on accumulating assets. But now, as we encourage people to rely on superannuation for their retirement income, more scrutiny and accountability is overdue.

This is not the first super fund outage to go under the radar this year. UniSuper had a technical issue that took its systems down for nearly a week when Google Cloud inadvertently deleted its private cloud subscription, affecting all member data.

In UniSuper’s case, all members were affected, and it issued a statement on day one. But the matter barely made a ripple in the media, with coverage trickling out only after the fact.

My heart sinks a little for retirees in this country – they continue to seem invisible to regulators, funds and the media. Come on, Australia, we need to do better.

This is what should happen when nearly 100,000 retirees are left without their payments:

Retirement funds should be obliged to publicly report major payment outages to their members and the media, with complete transparency. As with banks and employers, legislation should dictate that they do so, with immediate alerts about delays so that members aren’t left wondering.

They should issue proactive media statements, within hours of a payment delay, not respond when pushed for one days later. Assurance and transparency for members should be the top priority.

And they should be required to inform the regulator and be willing to openly communicate about the progress, causes and consequences of the issue.

Retirees deserve this level of respect. They deserve to know that their income, the income they rely on, is being handled with the same urgency as any other critical payment system in the country – and they deserve to know that legislators, the media and the public will hold companies to account if it isn’t.

Bec Wilson is the author of bestseller How to Have an Epic Retirement. She writes a weekly newsletter at epicretirement.net and is host of the Prime Time podcast.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.

Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.