Corporate watchdog slams superannuation funds on 'customer service', communications with retirees
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Tracy has been waiting almost six months for her superannuation request to be processed by one of Australia's largest funds.
The Perth woman asked that her full name not be used.
She held power of attorney for her mother, Vicky, who had been a member of HESTA for decades.
"She'd [her mother] been in and out of hospital a few times, but we thought we should withdraw her HESTA [superannuation funds] because mum had been asking me to do that," she said.
Just five days later, Vicky died.
The HESTA outage ended at the start of June, but Tracy still struggled to resolve the claim.
"We kept trying to ring and ring and ring, and just could never get through," she said.
For the past four months, Tracy said she was handballed between teams, asked to resend paperwork that had been lost between departments, and promised phone calls that never came, with one customer service representative even hanging up on her.
"Every person on the phone told me a different story or, you know, didn't know. They always said, 'I need to speak to a supervisor, I don't know.'"
When the ABC contacted HESTA, a spokesperson for the superannuation giant said: "We are sorry to hear about the experience of the member's beneficiary and can confirm the matter has been resolved."
However, as of Monday night, Tracy said she was yet to receive the funds or a final statement from HESTA.
Now, ASIC has turned its sights to how funds communicate with members about retirement, today launching a review of the practices of 12 superannuation funds, including HESTA.
The review examines in detail how 12 super trustees — collectively responsible for more than 9.3 million superannuation member accounts and $1.14 trillion in member assets — performed in assisting members with maximising, managing and having flexible access to their retirement income.
The trustees reviewed represent 45 per cent of APRA regulated funds by member assets and include: Australian Meat Industry Superannuation Pty, Aware Super Pty, Brighter Super Trustee, BT Funds Management, Commonwealth Superannuation Corporation, HESTA, Host-Plus, Legal Super, Nulis Nominees, REST, UniSuper and Vanguard.
The review covers the period between July 1, 2022 and December 11, 2024.
In mid-September, Tracy said HESTA's insurance team told her they had everything they needed to process the funds and would make it their priority.
But more than a month later, and almost six months since the initial request, no money has landed in their accounts.
"I'm getting so worked up and so stressed and getting sick from the stress … I just couldn't function properly, I wasn't sleeping at all," she said.
"I just want it to be over … but this hanging over our head, I just feel like I haven't really grieved fully, and there's no closure."
The HESTA spokesperson said the fund aims "to resolve all claims as quickly as possible" and recognises "the claims experience is a crucial moment for our members' beneficiaries".
"Death benefit claims can be complex due to a number of reasons, including where there are multiple beneficiaries and where there is no binding nomination."
ASIC said it was concerned that many Australians may not have the information they need to make informed decisions about retirement.
It found that some trustees offer one-size-fits-all retirement communications aimed primarily at pre-retirees, missing opportunities to engage with members throughout retirement and provide more meaningful support.
"Over 1.5 million members are in the retirement phase now, collectively holding approximately $575 billion in superannuation assets, and more than 2.5 million Australians will enter retirement over the coming decade," ASIC commissioner Simone Constant said.
"However, ASIC's Moneysmart research suggests only one-third of Australians on the cusp of retirement are confident that they will be financially comfortable once they leave the workforce.
"It is important now more than ever for superannuation trustees to focus their attention on providing meaningful, and timely retirement communications to their members that can meet their needs.
"Moreover, members entering retirement typically hold larger balances, require more tailored solutions and expect high-touch support.
"Trustees that can meet these needs stand to unlock powerful commercial outcomes: stronger member retention, deeper engagement, and scalable growth."
A recent report by think tank the Grattan Institute found that about 80 per cent of Australians find retirement planning complicated.
In particular, the review found that trustees are failing to adequately consider the needs of First Nations, vulnerable, and culturally and linguistically diverse members in their retirement communications.
"None of the trustees we reviewed developed specific retirement communications for vulnerable members," Ms Constant said, noting that one-third of trustees did not have a formal process that considered member feedback.
"Super trustees cannot understand member needs if they do not have processes in place for identifying specific challenges faced by diverse groups, particularly the most vulnerable among us," she said.
"Ultimately, our review found that trustees with robust governance, strong data and research capabilities, and effective benchmarking are delivering better communications, and in turn supporting better retirement outcomes for their customers."
ASIC said it will continue to monitor industry progress.
Written by Nassim Khadem and Adelaide Miller, ABC News.
The Perth woman asked that her full name not be used.
She held power of attorney for her mother, Vicky, who had been a member of HESTA for decades.
"She'd [her mother] been in and out of hospital a few times, but we thought we should withdraw her HESTA [superannuation funds] because mum had been asking me to do that," she said.
When Tracy submitted the application with HESTA in April, the super fund replied that it had begun a seven-week planned outage.Just five days later, Vicky died.
The HESTA outage ended at the start of June, but Tracy still struggled to resolve the claim.
"We kept trying to ring and ring and ring, and just could never get through," she said.
For the past four months, Tracy said she was handballed between teams, asked to resend paperwork that had been lost between departments, and promised phone calls that never came, with one customer service representative even hanging up on her.
"Every person on the phone told me a different story or, you know, didn't know. They always said, 'I need to speak to a supervisor, I don't know.'"
When the ABC contacted HESTA, a spokesperson for the superannuation giant said: "We are sorry to hear about the experience of the member's beneficiary and can confirm the matter has been resolved."
However, as of Monday night, Tracy said she was yet to receive the funds or a final statement from HESTA.
Super sector's communications under scrutiny
Tracy's experience with HESTA comes as the corporate watchdog ASIC places increasing scrutiny on super funds over their handling of death benefit claims and insurance payouts, and earlier this year delivered a scathing review of "often ineffective and insensitive" communications in the sector.Now, ASIC has turned its sights to how funds communicate with members about retirement, today launching a review of the practices of 12 superannuation funds, including HESTA.
The review examines in detail how 12 super trustees — collectively responsible for more than 9.3 million superannuation member accounts and $1.14 trillion in member assets — performed in assisting members with maximising, managing and having flexible access to their retirement income.
The trustees reviewed represent 45 per cent of APRA regulated funds by member assets and include: Australian Meat Industry Superannuation Pty, Aware Super Pty, Brighter Super Trustee, BT Funds Management, Commonwealth Superannuation Corporation, HESTA, Host-Plus, Legal Super, Nulis Nominees, REST, UniSuper and Vanguard.
The review covers the period between July 1, 2022 and December 11, 2024.
The waiting game with super funds
When HESTA member Vicky died, her daughter Tracy's withdrawal request on her behalf became a death benefit claim, with the superannuation to be divided evenly between Tracy and her three siblings.In mid-September, Tracy said HESTA's insurance team told her they had everything they needed to process the funds and would make it their priority.
But more than a month later, and almost six months since the initial request, no money has landed in their accounts.
"I'm getting so worked up and so stressed and getting sick from the stress … I just couldn't function properly, I wasn't sleeping at all," she said.
"I just want it to be over … but this hanging over our head, I just feel like I haven't really grieved fully, and there's no closure."
The HESTA spokesperson said the fund aims "to resolve all claims as quickly as possible" and recognises "the claims experience is a crucial moment for our members' beneficiaries".
"Death benefit claims can be complex due to a number of reasons, including where there are multiple beneficiaries and where there is no binding nomination."
Calls for super funds to meet retirees' needs
After earlier this year highlighting failings in super funds' communications regarding death benefit claims, the corporate regulator has now raised the alarm about communications and customer service in other dealings with members.ASIC said it was concerned that many Australians may not have the information they need to make informed decisions about retirement.
It found that some trustees offer one-size-fits-all retirement communications aimed primarily at pre-retirees, missing opportunities to engage with members throughout retirement and provide more meaningful support.
"Over 1.5 million members are in the retirement phase now, collectively holding approximately $575 billion in superannuation assets, and more than 2.5 million Australians will enter retirement over the coming decade," ASIC commissioner Simone Constant said.
"However, ASIC's Moneysmart research suggests only one-third of Australians on the cusp of retirement are confident that they will be financially comfortable once they leave the workforce.
"It is important now more than ever for superannuation trustees to focus their attention on providing meaningful, and timely retirement communications to their members that can meet their needs.
"Moreover, members entering retirement typically hold larger balances, require more tailored solutions and expect high-touch support.
"Trustees that can meet these needs stand to unlock powerful commercial outcomes: stronger member retention, deeper engagement, and scalable growth."
A recent report by think tank the Grattan Institute found that about 80 per cent of Australians find retirement planning complicated.
Simone Constant says only one-third of Australians on the cusp of retirement are confident that they will be financially comfortable once they leave the workforce. (ABC News: Billy Cooper)
Super funds fail to properly consider needs of First Nations, vulnerable people
The report said that while some trustees have taken meaningful steps to update their retirement communications, others are yet to follow through on stated intentions.In particular, the review found that trustees are failing to adequately consider the needs of First Nations, vulnerable, and culturally and linguistically diverse members in their retirement communications.
"None of the trustees we reviewed developed specific retirement communications for vulnerable members," Ms Constant said, noting that one-third of trustees did not have a formal process that considered member feedback.
"Super trustees cannot understand member needs if they do not have processes in place for identifying specific challenges faced by diverse groups, particularly the most vulnerable among us," she said.
"Ultimately, our review found that trustees with robust governance, strong data and research capabilities, and effective benchmarking are delivering better communications, and in turn supporting better retirement outcomes for their customers."
ASIC said it will continue to monitor industry progress.
Written by Nassim Khadem and Adelaide Miller, ABC News.
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