When funds grow faster than service: ASIC’s take on super’s death benefits problem

Superannuation is now the second largest, if not the largest, asset the average Australian owns in their lifetime

More than 100 years ago, retailers began declaring: “The customer is always right.”

It’s an enduring slogan that worked well for generations of organisations selling goods and services from bricks and mortar shopfronts.

Fast forward to 2025 and it is proving much harder to meet the needs of customers in a rapidly changing world.

Case in point is the superannuation industry, which has gone from a payday afterthought to a financial juggernaut. It has grown to $4.2 trillion in a generation – $2.9 trillion of that in the APRA-regulated system.

ASIC’s death benefit claims handling report released this week highlights some real challenges this rapidly evolving industry must fix, not just because the customer is always right, but because it is the right thing to do for their members.

Superannuation is now the second largest, if not the largest, asset the average Australian owns in their lifetime. Almost every working Australian has superannuation and is required to have it. More people have more money at stake – and they expect a level of service and information to match.

Perhaps even more significantly when it comes to service delivery, superannuation can be one of the critical places people turn to for financial support when at their most vulnerable.

But the maturity of superannuation fund operations has ­failed to match the mounting funds under management and service need. The result? Good service outcomes have fallen by the wayside.

As part of ASIC’s ongoing focus on superannuation member services, we have delivered 34 recommendations to industry on how to turn this around.

These recommendations are not just for the 10 trustees we examined through this report – some of whom had better practices than others. They are a challenge to the entire industry to lift its game, with urgency.

It’s going to take investment. It’s going to require a root-and-branch review of systems, governance, processes, communications and reporting.

What it all comes back to though is a simple concept – treating members as if they are customers. How can super trustees do this?

Treating your members as customers means speaking plainly – and regularly – to them.

It means making things easier, not harder, for the people you’re there to serve.

It means doing what you say you will do and delivering on your promises.

Ultimately, it means getting a grip on your data and your business – and putting customers at the centre of all your decisions.

In nearly 80 per cent of the claim files we reviewed, we saw delays that were actually within the trustee’s control to fix – within their gift, despite comment to the contrary.

Further, when we showed some superannuation trustees their own numbers on claims handling delays, many were surprised. We received a similar response when we read to them from their own complaint files.

We have recently seen this governance and leadership disconnect in other areas of corporate Australia. Super must be different. It is a compulsory product. That makes it even more important that standards are upheld and that trustees who fail them are held to account with the full force and effect of the law.

Our recent cases against United Super, the trustee of the Construction and Building Unions Superannuation Fund (Cbus), and AustralianSuper demonstrate that we are willing to do this.

We expect the expansion of the Financial Accountability Regime to superannuation trustees will also drive reforms in operating culture and reinforce the standards of conduct expected by the Australian community.

We will hold industry to account to deliver a step-change in superannuation member services. What we have created is a roadmap on how to do that for death benefits claims handling. The onus is now on trustees to show their members that they can get there.

We have hopes for the best. We have already seen some trustees take big steps in the right direction because of our work. To meet the fair expectations of members – of customers – we need the whole sector to walk ­together.

In the meantime, though, we must also prepare for the worst. Hence our focus on superannuation member services will continue. We are now widening our lens to other areas of member services to ensure that trustees are delivering the outcomes Australians deserve.

Superannuation is indeed a financial juggernaut, and these funds are now some of our largest financial institutions.

However, services can no longer be an afterthought and success cannot be measured by balance sheets alone.

Success is how superannuation trustees treat their customers – especially in those moments that really matter.

Simone Constant is a commissioner of ASIC, Australia’s corporate, markets and financial services regulator