Rest details internal program to reform death benefit processes

Rest has disclosed the existence of 'Project Scarlet,' an internal program that the fund's carried out over the past 18 months to improve its death benefit claims processes.

A spokesperson for the $93 billion super fund said the program aligns with its broader ambition to make the experience of superannuation as simple as possible for its members.

As part of Project Scarlet, Rest last year introduced a fast-track process for low-balance claims, improved its forms and requirements, and increased follow-ups with claimants alongside targeted interventions to keep claims moving, the spokesperson said.

"We've made significant improvements to the speed of our death benefit claims handling and have now doubled the number of claims resolved within 90 days," the spokesperson said.

"We've also reduced the number of open claims at 180 days by almost a third and expect to continue resolving claims at this pace, or more quickly, going forward."

Rest's announcement of the internal program comes on the back of ASIC's review into the death benefit claims handling practices of 10 superannuation trustees in March.

ASIC's review found Rest had resolved just 8% of claims within 90 days - the lowest rate among the trustees assessed.

The Australian Financial Complaints Authority (AFCA) considers three months a reasonable timeframe for finalising straightforward death benefit claims.

The review also showed that Rest had resolved none of its claims within 30 days, 3% within 60 days - the second lowest among the trustees assessed - and 20% within 120 days - lowest of all trustees. Meanwhile, nearly half of its resolved claims exceeded 180 days.

Rest's claims handling has drawn criticism beyond ASIC's findings. In a recent case, consumer advocate Adam Glezer told Financial Standard, he had to bypass the fund and deal directly with its insurer to expedite a terminal illness claim.

A Rest spokesperson pointed to demographic factors that may explain the fund's processing timeframes, noting it has the highest proportion of young members, with more than one million under the age of 30.

The spokesperson said these members are less likely to access financial advice or engage in estate planning, and just 4% have a binding death benefit nomination in place.

"This can add time and complexity to our death benefit claims to understand who should receive a benefit after a member passes away," the spokesperson said.

Rest, however, struck a more contrite tone in the immediate aftermath of the ASIC findings, with chief service officer Brendan Daly conceding the fund hasn't always met expectations.

"Our members and their beneficiaries rightly expect the highest level of service from us, and we acknowledge there are times when, despite our best endeavours, we unfortunately don't meet these expectations," Daly said.

He, like the spokesperson, also pointed to the structural challenges in the claims process, noting that death claims are often complex, and in the absence of a binding nomination, may require the fund to wait for more information from a claimant or take further steps to "properly investigate a claim."