The trust we place in financial institutions is paramount, especially when it comes to managing our life savings and ensuring our loved ones are taken care of after we're gone. This trust was severely tested for Mary-Cate Pickett, a widow who endured an almost year-long ordeal with Australian Ethical, an institution that prides itself on its ethical investment strategies. The company has recently issued an apology for what it has termed 'appalling service' after taking nearly a year to process the superannuation payout of Ms. Pickett's late husband, John Street.

John Street, a member of Australian Ethical, passed away in Tasmania in February of the previous year, having accessed euthanasia under the state's voluntary assisted dying laws. His wife, Mary-Cate, promptly notified the fund of her husband's death through her lawyer the following month. Despite being the sole beneficiary, she faced a distressing and drawn-out process to access her husband's retirement savings, which were only transferred to her this February.


'It was exhausting. It was very, very stressful,' Ms. Pickett recounted. 'I believe that it's had an impact on my health long term because of the ongoing stress that I had and the feelings of powerlessness that I had as a result of my interactions with them.'


Australian Ethical, which manages almost $13 billion for over 130,000 customers, has admitted to several failures in providing the expected level of service. An internal investigation into Ms. Pickett's case revealed 'periods of unnecessary delay, poor communication, and procedural failure.' The company has since expressed its wholehearted apology and has taken steps to implement 'appropriate and immediate change to our claims and complaints handling.'


The case has shed light on the broader issue of superannuation funds outsourcing customer administration to third-party operators. At the time of Ms. Pickett's claim, Australian Ethical had a contract with financial services company Mercer. The lack of transparency and communication between the fund and its third-party administrator added to the confusion and frustration experienced by Ms. Pickett.

This incident comes at a time when the Australian Securities and Investments Commission (ASIC) is scrutinizing the superannuation industry's handling of deceased or severely injured customers' accounts. ASIC has recently taken legal action against construction industry fund Cbus for delays in processing death and disability insurance claims and is investigating other funds for similar issues.

Superannuation lawyer Paul Watson has highlighted the risks of outsourcing administration and the need for super funds to properly oversee fund administrators. He advocates for an enforceable super industry code of conduct with time limits for administrative decisions and external oversight to hold super funds accountable.


The distressing experience of Ms. Pickett serves as a stark reminder of the potential pitfalls when dealing with super funds, particularly in times of personal crisis. It raises important questions about the accountability of these institutions and the security of our money. As consumers, it's crucial to be aware of the practices of the funds we invest in and to demand transparency and efficiency, especially when it comes to the handling of our funds after we pass away.
Members of the Seniors Discount Club, have you or someone you know faced similar challenges with superannuation funds? How do you feel about the outsourcing of customer administration by these funds? Share your thoughts and experiences in the comments below, and let's discuss the importance of reliable service and ethical practices in managing our life's savings.