‘More needs to be done’: Super funds under pressure over outages

The Federal Government has taken another crack at super funds over their customer service record.

Australian Retirement Trust, the nation’s second largest super fund, suffered an outage which saw pension payments delayed for days.

The Federal Government has taken another crack at super funds over their customer service record, days after mega-fund Australian Retirement Trust suffered an outage which delayed pension payments to members.

Financial Services Minister Stephen Jones on Monday once again put super funds on notice following the second major outage suffered by a big super fund this year, warning they needed to do more to support members.

But, he stopped short of flagging any change which would see mandatory minimum customer service standards imposed on the industry.

“The superannuation industry will increasingly be judged by the customer service received throughout a member’s working life and retirement,” Mr Jones told The Australian.

“The government has made its views clear. The superannuation industry has been responding, but more needs to be done,” he said.

Mr Jones was speaking as Australian Retirement Trust, the nation’s second largest super fund, with $320bn in assets under management, sought to downplay its recent outage, reportedly caused by a file error.

A notice of the outage, which delayed pension payments for 20,000 members late last month, was quietly put up on the fund’s website once the fund realised member’s payments’ hadn’t gone through. Affected members were also emailed where the fund had an email on file.

The website update, meanwhile, was deleted and replaced each day with a new update, meaning members who had not visited the website in the days prior were given limited information on the issue.

The outage “resulted in some members experiencing a delay in receiving their income payments,” an ART spokesperson told The Australian.

“Getting our members’ money into their accounts was our top priority. All income payments were processed by us on Wednesday, 30 October and we communicated directly with impacted members by email.”

While the fund worked to restore its system and make good on the late payments, the fund’s other transactions fell behind, a further update on the website confirmed on Monday.

“Thank you for your patience while we’re still working through all other transactions which might take more time than usual,” the update said.

Australian Retirement Trust’s outage is the second major systems failure suffered by a large super fund this year, with UniSuper’s system crippled for more than a week in May after Google Cloud accidentally deleted its account.

Not only were UniSuper’s more than 600,000 members not able to access their accounts, for 10 days they were also unable to switch their investments or make withdrawal requests.

While the government has put funds on notice over their customer service, advocacy group Super Consumers Australia urged further action, including mandatory minimum standards to hold funds to account.

“There is harm from these outages, it’s more than just an inconvenience. In other industries such as the banking and telecommunications sectors, there are minimum standards and obligations on how they communicate with customers. But, with super funds there’s no clear standards there, and there’s no ability, no easy way to get compensation if there is financial harm,” Super Consumers Australia chief executive Xavier O’Halloran said.

“It’s not really good enough to have a message up briefly on a website and then delete it the next day. We want them to be much more proactive in contacting their members when things go wrong and explaining what they’re doing about it.

“And we want to see minimum time frames in place so if a system goes down, that they commit to (a time frame) in terms of getting it back up,” he said.

The prudential regulator said it was keeping a close watch on outages.

“APRA closely monitors reported outages and the remediation steps taken by regulated entities,” an APRA spokesperson said.

“In line with existing standards and the incoming prudential standard CPS 230 Operational Risk Management, APRA expects entities to effectively manage and maintain operations through disruptions, including having appropriate business continuity plans.”

The latest outage comes weeks after the regulator released, for the first time, detailed information on how funds spend members’ money.

Australian Retirement Trust was the second-highest spender on marketing, handing over $42m on sponsorships and other marketing campaigns in the 2023 financial year.

It also had the highest admin costs of all the funds, spending $650m on admin in just 12 months.

All up, super funds spent $10.83bn of members’ money in the 2023 financial year, including $5.6bn on admin and marketing costs, and as a further $3.8bn on investment management.