Super fund faces criticism for delaying over 10,000 claims for months
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When we think of superannuation funds, we often consider them the steadfast pillars of our financial security, especially as we transition into retirement.
They are the guardians of our hard-earned money, the nest egg we rely on for a comfortable and dignified post-work life.
However, even the most trusted institutions can falter, and when they do, the consequences can be dire for those who depend on them the most.
In a recent and profoundly unsettling revelation, Cbus, a significant superannuation fund in Australia, has been thrust into the spotlight for all the wrong reasons.
The fund has been forced to issue a humbling apology after the Australian Securities and Investments Commission (ASIC) accused it of a disgraceful act involving $20 million worth of delayed death and disability claims.
Superannuation funds are not just about retirement savings; they also provide critical insurance coverage to support members and their families in dire need.
When a loved one passes away or is unable to work due to disability, these claims can mean the difference between stability and financial ruin.
ASIC has taken Cbus to the Federal Court, alleging that the fund's failure to process over 10,000 claims within the expected 90-day period has caused genuine harm to its members and their families.
The delays are not just weeks or months; astonishingly, over 6,000 claims were reportedly left unresolved for over a year by late 2022, representing more than half of the fund's claims.
The deputy chair of ASIC, Sarah Court, expressed the regulator's stance with poignant clarity:
'We allege Cbus failed its members and claimants at their most vulnerable time.'
The additional stress and anxiety caused by these delays compounded the difficulties faced by members already grappling with grief, injury, or illness.
In a statement, Cbus acknowledged the delays and the distress they caused, apologising to affected members and their families.
The fund has initiated a compensation scheme and has taken steps to improve the management of insurance claims.
Cbus also stated that it has cooperated with ASIC's investigation and seeks to settle the matter outside of court.
However, the allegations against Cbus extend beyond the delays themselves. ASIC claims that the fund failed to report the breaches within the required 30-day period upon becoming aware of them, as mandated by law.
Furthermore, the regulator contends that Cbus needed to ensure its eventual breach report was accurate and accurate.
ASIC is now seeking penalties, declarations, adverse publicity orders, and compliance matter orders through the court.
This legal action underscores the seriousness of the allegations and the regulator's commitment to protecting vulnerable Australians.
Cbus, which is tied to several unions, including the CFMEU, serves more than 920,000 members and manages $94 billion in assets.
This scandal is a stark reminder that even the largest and most established funds are not immune to scrutiny and must uphold the highest standards of conduct and service.
Have you or someone you know been affected by delayed claims? How has your super fund handled your inquiries and concerns? Share your experiences in the comments below.
They are the guardians of our hard-earned money, the nest egg we rely on for a comfortable and dignified post-work life.
However, even the most trusted institutions can falter, and when they do, the consequences can be dire for those who depend on them the most.
In a recent and profoundly unsettling revelation, Cbus, a significant superannuation fund in Australia, has been thrust into the spotlight for all the wrong reasons.
The fund has been forced to issue a humbling apology after the Australian Securities and Investments Commission (ASIC) accused it of a disgraceful act involving $20 million worth of delayed death and disability claims.
Major superannuation fund Cbus acknowledged a delay in processing $20 million in death and disability claims. Credit: Unsplash
Superannuation funds are not just about retirement savings; they also provide critical insurance coverage to support members and their families in dire need.
When a loved one passes away or is unable to work due to disability, these claims can mean the difference between stability and financial ruin.
ASIC has taken Cbus to the Federal Court, alleging that the fund's failure to process over 10,000 claims within the expected 90-day period has caused genuine harm to its members and their families.
The delays are not just weeks or months; astonishingly, over 6,000 claims were reportedly left unresolved for over a year by late 2022, representing more than half of the fund's claims.
The deputy chair of ASIC, Sarah Court, expressed the regulator's stance with poignant clarity:
'We allege Cbus failed its members and claimants at their most vulnerable time.'
The additional stress and anxiety caused by these delays compounded the difficulties faced by members already grappling with grief, injury, or illness.
In a statement, Cbus acknowledged the delays and the distress they caused, apologising to affected members and their families.
The fund has initiated a compensation scheme and has taken steps to improve the management of insurance claims.
Cbus also stated that it has cooperated with ASIC's investigation and seeks to settle the matter outside of court.
However, the allegations against Cbus extend beyond the delays themselves. ASIC claims that the fund failed to report the breaches within the required 30-day period upon becoming aware of them, as mandated by law.
Furthermore, the regulator contends that Cbus needed to ensure its eventual breach report was accurate and accurate.
ASIC is now seeking penalties, declarations, adverse publicity orders, and compliance matter orders through the court.
This legal action underscores the seriousness of the allegations and the regulator's commitment to protecting vulnerable Australians.
Cbus, which is tied to several unions, including the CFMEU, serves more than 920,000 members and manages $94 billion in assets.
This scandal is a stark reminder that even the largest and most established funds are not immune to scrutiny and must uphold the highest standards of conduct and service.
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