Retail union fund owes a refund

A retail worker who admitted charging a customer for something they did not purchase, but only refunded the payment if asked, would not be in their job for long.

But that is what has happened at the union-linked Retail Employees Superannuation fund (two million members, $98bn in funds under management).

As Cliona O’Dowd reports, last June REST’s administration service provider mistakenly started deducting insurance fees from fund members who had either cancelled or never had cover.

The fund did not know about the problem for six months and then people being slugged did not get the news for another four weeks or so.

But wait! There’s more, and it is worse.

REST wrote to affected members explaining a mistake had been made and that they only had to ask for the insurance to be cancelled and their money refunded.

This is more than a bit rich. Surely REST should have given members who had never taken out insurance or cancelled it their money and let them decide what to do next.

And in the event that any claims for the period of unintentional cover turned up after members were refunded, perhaps REST could honour them as a commitment to customer service.

It would be a gesture the four representatives of the Shop Distributive and Allied Employees Association on the REST board would surely support.

Their members are not highly paid and the many young ones are not necessarily wise in the ways of superannuation.

Doing so would be an example of customer commitment to the boards of other industry (a euphemism for union official heavy) superannuation funds, such as construction industry-based Cbus, chaired by Wayne Swan, treasurer in the Rudd Labor government.

Mr Swan talks a big game about workers’ rights, presumably including those of CFMEU-linked members of his super fund board.

But Cbus recently admitted to administrative failings that led to 12-month delays to death and disability insurance claims by 10,000 members.

The Australian Securities & Investments Commission is also suing Cbus, alleging “systemic claims-handling failures”.

While superannuation funds can now recruit members in the open market, industry-based ones such as REST have long presented themselves as friends of ordinary workers in the industries they were started to represent.

REST’s pitch states: “We are driven by our purpose to create super our members love and our mission to make super simple.”

It does not look like it now.