Association of Superannuation Funds of Australia Conference 2023

Headshot of Danielle Press

Speech by ASIC Commissioner Danielle Press at the Association of Superannuation Funds of Australia Conference, 22 February 2023.

Check against delivery

Good afternoon and thank you to the Association of Superannuation Funds Australia for inviting me to speak today.

To start I want to briefly touch on a topic raised by Katrina – cyber and fraud.

One of ASIC’s strategic priorities across the financial services sector is to drive good cyber-risk and operational resilience practices and act to address digitally enabled misconduct, including scams.

Considering this and complementary to the work that APRA is undertaking, we have a particular interest in how trustees deal with consumers who might be impacted by cyber issues and scams.

Recently we’ve seen cyber-attacks affect the integrity and efficiency of global markets, and in turn, trust and confidence in service and product providers.

ASIC will continue to work closely with APRA and other regulators, regulated firms, and Government on these important issues.

Dealing with members

In my opening remarks I would like to talk about how trustees deal with their members day to day.

In our work, we have a strong focus on the interactions members have with their superannuation funds.

It's important for trustees to take practical steps to promote good member outcomes so members can have confidence in their superannuation funds.

This is especially important for those members who are moving into or are in the retirement income phase.

Internal dispute resolution

One area where we recently looked at how trustees are treating their members and identified some issues is internal dispute resolution.

In 2022 ASIC released findings of a review that looked at IDR practices across 35 trustees.

Completed in two stages, the targeted review found that some trustees had sub-standard arrangements for managing complaints.

Stage one looked at 35 trustees, focusing on complaints other than complaints for death benefits. We found that:

  • Almost 1 in 5 of the trustees were not meeting the 45-day timeframe that is set out in ASIC’s Regulatory Guide 271; and
  • most trustees failed to ensure all complainants were kept informed when their response to the complaints exceeded the maximum timeframe.

The second stage involved a more detailed review of a sub-set of 10 trustees included in stage 1 of the review. Our more detailed review found that:

  • Most of those trustees could not demonstrate how they learnt from complaints to improve their services; and
  • trustees’ internal reporting often lacked sufficient detail to identify, much less remedy, deficiencies in complaint handling.

When something goes wrong, members need to know they can raise an issue and that it will be addressed quickly and fairly.

I strongly encourage all superannuation trustees to critically examine their dispute resolution arrangements based on our findings, make timely improvements and ensure they are fit-for-purpose going forward.

Improving member experience

Our IDR work is just one example that has shown that trustees could do more to deliver for their members in practice.

In a highly regulated environment, there is a danger of having a compliance only mindset – doing the bare minimum to meet specific legal obligations.

But trustees need to move beyond this, having regard to their core duties.

Members should be at the heart of decision-making and how superannuation products are developed, governed and marketed as well as how the fund operates day to day.

Drawing from other recent work, trustees seeking to ensure that their fund operates in the interests of members should ask themselves questions:

  • Are we monitoring and testing how members use the fund’s products, services and communications, and the outcomes they receive, using the insights to make improvements?
  • How can we ‘error-proof’ missed or misunderstood messages or processes that have important consequences for members?
  • Do we have a choice architecture that helps members make and execute appropriate decisions?
  • Are there systems in place to identify and deal with situational or other vulnerabilities?
  • Do we have the right systems, processes and governance arrangements to deliver on promises to members effectively and efficiently?

ASIC will continue to engage with trustees with a focus on improving trustee responsibility, accountability and transparency.

Where we see issues, ASIC will take action as appropriate so that trustees deliver member services and outcomes that members are entitled to expect and meet their broader conduct obligations such as to operate efficiently, honestly and fairly.