ASIC tells super: 'You have everything you need to not fail'

ASIC commissioner Simone Constant has told Financial Standard the regulator has super funds in its sights for more than just claims handling delays.

"The main focus is on member services more generally, this is a multi-year phased project" Constant said.

"We will come back to death benefit claims handling and check that funds are doing what they said they will do. But there is more that we will be doing, and we'll announce more in that regard soon."

Constant said the regulator has been investigating claims handling delays for close to two years now, but in the process has also identified a wider range of issues affecting member services, including issues relating to accessibility.

"There were around 48 [super funds] in the first suite we were looking at more comprehensively. We narrowed it down and looked at around 24 websites and specific communications in that regard; how funds were communicating with members, with claimants, and whether they were thinking about things like those who didn't have English as their first language, whether their forms were available, whether explanations were on the website about death benefit nominations, things like that," she said.

"In that group of 24 we had a cross section of funds that we looked closely at, and then we narrowed that down further. Now two of the funds, of course, which are two of the largest funds we've taken action against, is Cbus and AustralianSuper."

Constant said ASIC will continue to apply pressure to the sector to ensure that all funds - no matter how big or small - are meeting their obligations to members.

"It's not up to us to talk about how people get on the boards or the executive positions, and it's not up to us to tell them how to organise themselves, whether that be type of fund or whether it be how they organise their services. So, whether it's in-house or outsourced, it is for us to say to them, you need to know what's going on in that member experience," Constant said.

"You need to be looking at that key data and informing yourself, and you need to be responding accordingly, including whether it's investing in certain areas, whether it's changing approach, whether it's changing process, whether it's understanding things more from that member perspective."

Constant said the regulator has been very open with funds about its expectations and has provided them with everything they need to ensure they don't fail - but said that if they do, more action will be taken.

"One thing we've been really clear about is not letting or setting the industry up to fail here. As we started to look at this area, we were very open with communication, but also with the funds. We have said, 'this is what we're looking at'," Constant said.

Constant pointed to the raft of information the regulator has provided superannuation trustees based on its own surveillance and even provided them with suggestions for how to improve their services - yet shockingly, some funds are still not meeting expectations.

"As we found problems, we've gone through and communicated that with the industry. We published an article that had some rich data, ideas for better practices, guidance on how funds could have interacted with members, then at the board and executive level, how they could have changed processes and procedures," she said.

She said where serious failures are identified, ASIC won't hesitate to take serious action.

"We need to do our job, and our job by law is to bring full force and effect for the law. It's literally written into our act," Constant said.

"Where it's warranted, where we see this sort of failure, we need to bring the case. But it's up to the trustees in the industry to respond accordingly. And responding accordingly to us doing our job, is them doing their job so that hopefully we don't need to end up in court and having to bring penalties.

"Instead of a debate being held about whether money is paid for a fine, actually invest into systems, the right processes and the right arrangements so that the responsibilities to these members are met, then we don't need to bring an action."

ASIC is releasing a new episode of the Inside ASIC podcast series which will focus on the work that went into producing the superannuation death benefits report, what the industry must fix and and the toll producing the report took on some of those involved.