The revelation that some superannuation funds are withholding fees from deceased members' accounts has raised ethical and financial questions about the management of death benefits. Such practices can impact beneficiaries who rely on these funds during a challenging time. Moreover, the report undercoves variability in how swiftly claims are handled, indicating inconsistencies in service quality across the sector. This could erode trust among members and beneficiaries regarding the financial stewardship and reliability of these funds.
In response to ASIC's findings, the superannuation sector is expected to improve its practices, particularly concerning fee deductions from deceased members. The report recommended stopping such deductions during claim processing, and some trustees are already revisiting their policies. The Association of Superannuation Funds of Australia (ASFA) acknowledged the sector's shortcomings and promised to enhance claims processing. The focus is now on better handling of death benefits, which is anticipated to be reflected in fewer complaints to the Australian Financial Complaints Authority (AFCA). As the industry works toward reform, stakeholders will be closely watching to ensure that super funds align with best practices and regulatory expectations.
