Trustees lack death benefit claims uplift urgency: ASIC

Two years since ASIC cracked the whip on superannuation funds to improve death benefit claims handling practices, a follow-up review found very little to no improvements have been made.

ASIC's review of 45 trustees found varying degrees of urgency in response to its scathing review of death benefit claims handling processes released last year.

While most trustees reported taking steps to uplift their practices and are committed to taking further action, some demonstrated no urgency in responding at all.

"We're particularly concerned that some trustees have not actioned basic process improvements and continue exposing grieving beneficiaries to harm at times of heightened emotional and financial distress," ASIC commissioner Simone Constant commented.

"Unfortunately, despite complaint numbers and trends rising overall between 2020 and 2026, early findings indicate that five of the 10 trustees we are reviewing have not identified a single systemic issue from analysis of their complaints data over our review period.

"At least one trustee failed to analyse their complaints data at all. This is baffling, and frankly, unacceptable."

Released today, Report 831 Delivering on death benefits: Have super trustees stepped up? provides an update to ASIC's investigation into how trustees were taking or not taking ownership of their death benefit claims processes, the findings of which were released in March 2025.

On last year's report, Constant said at the time while some trustees demonstrated good handling practices and were providing helpful services to claimants, "systemic failures" by other trustees "exposed grieving Australians to added and unnecessary distress."

"Grieving Australians should not have to suffer further stress because of the failure of superannuation trustees to approach claims in a timely, clear, and respectful manner," Constant said.

"Trustees have not put in place meaningful performance objectives, tracking or reporting, and have failed to approach claims handling with consumers front of mind."

One trustee took over 500 days to pay a death benefit of around $100,000 to a First Nations woman who was grieving the loss of her husband.

Cbus and AustralianSuper were headliners in this department. Cbus paid a nearly $24 million fine for the lengthy delay of death benefit payments, while AustralianSuper sat on claims that exceeded internal targets of four months.

This time around, some trustees not only continue to refuse to take any ownership of death benefit claims practices but also their overall member service delivery.

"Holding superannuation trustees to account for member service failures continues to be one of our enforcement priorities. Where we identify non-compliance, we will consider the full range of regulatory tools available, including enforcement action," Constant warned.

On a positive note, the review found internal dispute resolutions (IDR) dropped by 53% in the number of complaints about death benefit claims handling delays from the beginning of 2024 to the end of 2025.

External dispute resolution (EDR) data also improved, with complaints about death benefit claims delays falling over 72% during the same period. But super-related complaints in general remain elevated.

"While these results are encouraging, complaints about superannuation remain high - trustees received over 200,000 IDR complaints in 2024-25. Over half of these complaints related to service issues, with delays in claim handling more broadly representing one of the top five services issues complained about," Report 831 said.

Where super funds can do better significantly is in improving timeframes for processing claims and effectively measure claims-handling performance.

While some have objective performance metrics for processing death benefit claims, what was "concerning" for ASIC is that others "failed to introduce basic metrics covering end-to-end claims handling times, even where they could track end-to-end times."

ASIC also wants trustees to do more to encourage members to make valid binding nominations and improve support for First Nations members and claimants.

For the next steps, ASIC is testing how well trustees use member complaints data to identify and address systemic issues and to improve service delivery.