The report highlights several critical issues in the trustees' management of death benefits, which are the residual amounts in a member's account after their passing. These amounts may include insured benefits if the member had coverage through their superannuation. Concerns raised by ASIC include excessive delays, ineffective communication, and a lack of sensitivity in dealing with claimants, particularly those from First Nations communities or those in vulnerable situations.
There is significant disparity in the timeframes for processing claims among trustees. While one trustee impressively managed to finalise about 48% of claims within 90 days, another struggled to close even 8% in the same period. The use of valid binding nominations significantly sped up the claims process, and uninsured claims were resolved slightly faster than insured ones.
ASIC offers specific recommendations to address these issues. Trustees should meticulously monitor the processing times for both insured and uninsured claims. Additionally, implementing metrics with enough detail will help trustees swiftly pinpoint and rectify issues in the claims process. Such improvements are crucial in alleviating the distress of beneficiaries and enhancing trust in the superannuation system.
This report serves as a wake-up call for trustees to prioritise the development of effective claims handling systems. Ensuring that beneficiaries receive timely and empathetic support is not only a regulatory requirement but also a moral obligation that trustees must uphold. The findings highlight the need for ongoing reform to bridge the gap between current practices and beneficiaries' expectations.
