Michele O’Neil defends AustralianSuper board in death claims payouts controversy

ACTU president Michele O’Neil, a director of AustralianSuper, has defended the superannuation giant’s response to allegations it delayed almost 7000 death claims payouts.

ACTU president Michele O'Neil. Picture: NCA NewsWire / Martin Ollman

Michele O’Neil, the president of the ACTU and board director of AustralianSuper, has defended the $365bn superannuation giant’s response to allegations it delayed almost 7000 death claims payouts, days after Australian Securities & Investments Commission chair Joe Longo reprimanded the union-backed fund as an exemplar of mounting governance failures within the $4.1 trillion retirement savings sector.

The corporate watchdog last week revealed it was suing the country’s largest superannuation fund for repeated failures in assessing almost 7000 death benefit claims in the four years to October 2024, alleging AustralianSuper’s board knew of the matter as early as November 2020.

At the National Press Club on Wednesday, Ms O’Neil – appointed as a director of AustralianSuper in 2021 as a representative of the peak union body – defended the industry fund’s response to the incident, citing its move to refer the matter to the industry regulator.

“It was AustralianSuper through the board and its management that reported this. We found this, we said ‘This is not OK’,” Ms O’Neil said.

“We voluntarily reported it and said ‘These are the things we are doing to fix it’.”

She pointed to Australian­Super’s decision to remove outsourced administration provider Link, now called MUFG Pension & Market Services, from delivering member-facing services.

“I think it is clear that there have been important lessons learned and changes made,” she said, also citing AustralianSuper’s establishment of a 75-person “bereavement centre” that will instead handle high-care duties such as death benefit claims.

In a speech to the Australian Institute of Company Directors last Wednesday, Mr Longo described Australia’s compulsory retirement saving sector as the “poster child” for governance failures, lashing AustralianSuper for mismanaging member services.

“This matter is about protecting vulnerable Australians and their families,” he said.

“It is also a demonstration of what can happen when there is not adequate oversight of systems in an organisation.”

Australian Chamber of Commerce and Industry chief executive Andrew McKellar, appearing alongside Ms O’Neil at the Press Club, said the recent controversy engulfing AustralianSuper demanded a broader response to governance requirements applying to the superannuation sector.

“There are governance issues in superannuation and industry superannuation that need to be looked at and looked at carefully,” he said, pointing to strengthened governance requirements recently proposed by the Australian Prudential Regulation Authority.

“There are issues in terms of governance standards within superannuation,” he said.

“We need to protect members’ money, we need to ensure it is used for the purposes that it is ­intended, that it is not delayed in going to the intended beneficiaries.”

The governance of the superannuation sector has come under the microscope in recent months after APRA ordered an investigation into fellow union-linked fund Cbus over its affiliation with the scandal-plagued CFMEU.

The ACTU has resisted APRA’s proposed governance requirements – which include raising minimum standards relating to the fitness of fund trustees – saying the changes would undermine union and employer representation on industry fund boards.