AustralianSuper removes services from administrator MUFG and brings them in house

The nation’s biggest superannuation fund has severed ‘member facing’ operations with administrator MUFG and will bring advice in house in order to repair its reputation.

AustralianSuper is bringing more services in-house and away from under-fire administrator MUFG.

AustralianSuper will remove under-fire administrator MUFG from all member-facing services as it looks to repair its reputation following a series of damning failures.

The nation’s biggest super fund, with 3.5 million members and more than $355bn in assets under management, is preparing to move advice and employer services in-house, months after it brought complaints and death claims handling back under its own roof.

Following the changes, administrator MUFG, formerly Link Group, will no longer provide any member-facing services for the fund.

“We’ve shifted a number of our really high-care tasks either in-house or to the best provider in the industry,” chief member officer Rose Kerlin told The Australian.

“We moved our insurance claims handling processes from MUFG to TAL. And we appointed Concentrix, which is a market-leading provider, to provide contact centre services. We’ve started transitioning all of the contact centre services across to our teams in Brisbane and Townsville … and we’re (now) looking to in-house phone-based advice and our employer services.”

AustralianSuper chief member officer Rose Kerlin.

MUFG has been at the centre of the scandals engulfing the $4 trillion super industry. It provides back-office functions for some of the biggest funds around the country, serving about 40 per cent of the market.

Funds including Cbus, Rest and AustralianSuper have all suffered very public services failures that have been attributed to shortcomings at MUFG, but regulators have pushed back on attempts to blame third-party providers.

Despite the scandals, AustralianSuper will retain MUFG for basic services.

“We’ve got 290,000 transactions a day coming through, and MUFG are excellent at that big-batch processing. They’re very good at doing that at scale, so we’ll continue that with MUFG. We’re always reassessing who is the best provider,” Ms Kerlin said.

AustralianSuper’s move to take control of more back-office functions comes as the megafund is being investigated by the corporate regulator over delays in paying out death benefits to beneficiaries of its deceased members.

It has already remediated 7000 members $4.2m over the delays – funded from its operational risk reserves, ultimately paid for by members – and yanked control of insurance claims and death benefit claims off MUFG just under a year ago, establishing a 75-strong “bereavement centre” to handle high-care tasks.

That move has seen it cut a month off processing times for death claims, with 70 per cent now processed within four months.

As it prepares to swell to five million members in the coming decade, the super fund is also preparing to automate some services, a step that will see death and disability claims handled online rather than over the phone.

“We’re midway through the next phase of service improvement and building out that mix of service providers we’ve got and making other enhancements,” Ms Kerlin said.

“We’re moving insurance claims online, because we want it to be really easy for members to make a claim and track it to completion.”

The shift to in-house advice also comes as the industry prepares to welcome a raft of new, lesser-qualified advisers as part of the government’s Delivering Better Financial Outcomes reform package, still to be legislated.

“This sets us up for future scale, that’s a key component,” Ms Kerlin said. “Having (advice) in-house, and also our employer services … we’ll be able to provide the best, personalised guidance and advice when that’s required.”

Months after compensating members affected by slow death claims processing, AustralianSuper was last month fined $27m for failing to merge duplicate accounts held by more than 90,000 members over a nine-year period.

The fund has already compensated affected members $69m for losses suffered due to multiple administration fees, insurance premiums and lost investment earnings, with the funds again coming from reserves.