When someone you love passes away, the last thing you want is to spend months—or even years—fighting with a super fund to access money that should rightfully be yours.
Yet across Australia, this nightmare scenario has been playing out for thousands of families, with some waiting over three years for death benefit claims to be processed.
Now, the corporate regulator ASIC has declared war on the industry's systematic failures, launching lawsuits against major funds and demanding urgent reforms.
At the centre of this regulatory storm, Cbus Super has announced sweeping changes designed to cut weeks from the claims process—changes that could signal a transformation across the entire industry.
The scale of Australia's death benefit crisis
The numbers are staggering: approximately 6.5 million Australians with super haven't made death benefit nominations, leaving their families vulnerable to lengthy disputes and delays when grief should be their primary concern.
ASIC's landmark review found that 78 per cent of death benefit claim delays were caused by processing issues entirely within the super fund's control - not complex family disputes or missing paperwork, but simply poor systems and inadequate staffing.
The human cost has been devastating. AustralianSuper alone delayed processing nearly 7,000 death benefit claims between 2019 and 2024, with some families waiting over three years, and one case dragging on for 1,140 days.
'Delays are likely to cause further pain and anxiety to people who are already suffering from grief, making what is already a difficult time even harder'
Cbus leads industry transformation
Cbus Super, which manages $100 billion for more than 924,000 members, was hit with ASIC action last year over delays affecting more than 10,000 death and disability claims, with estimated financial losses of $20 million to members.
Their response has been radical. The fund is completely overhauling how death benefits work, introducing what CEO Kristian Fok calls 'stripping away' outdated complexity.
What's changing at Cbus
The fund is eliminating the confusing distinction between binding and non-binding nominations that has trapped so many families in bureaucratic limbo. Instead, they're introducing:
- Digital-only nominations that can be completed online without witness requirements or paper forms
- Non-lapsing binding nominations that don't expire every three years
- Automatic hierarchy system where benefits flow to spouse, then children, then estate if no nomination exists
- Elimination of 'claim staking' processes that previously added 4-6 weeks to payouts
Understanding nomination types
Binding nomination: Legally forces the fund to pay your chosen beneficiaries (if they qualify under super law)
Non-binding nomination: The fund 'considers' your wishes but makes the final decision
No nomination: The fund decides based on super law and their own policies
The changes won't happen overnight—Cbus plans an 18-month rollout starting in December. But the implications extend far beyond one fund.
The regulator's unprecedented crackdown
ASIC's action against major super funds represents the most significant regulatory intervention in death benefit processing in decades.
The regulator launched civil penalty proceedings against both Cbus and AustralianSuper within months of each other, sending shockwaves through an industry that has long treated customer service as an afterthought.
ASIC's report handed down 34 recommendations to super trustees, with Chair Joe Longo calling out 'excessive delays, poor customer service, and ineffective claims handling procedures' and demanding industry leaders 'take ownership of the problems'.
The compensation wave begins
Major funds are now scrambling to make amends. AustralianSuper has started compensating beneficiaries whose death benefit claims took longer than four months to process, while creating a new 75-person Bereavement Centre with dedicated case managers.
Why higher fees don't mean better service
One of the most surprising findings from the regulatory review challenges a fundamental assumption many Australians hold about their super fund choice.
Research by Super Consumers Australia found no relationship between fees and death benefit processing speed—paying higher fees did not translate into getting better service. In fact, the funds that processed death benefits fastest had some of the lowest fees.
Did you know?
Did you know?
Some of the fastest-processing funds charge as little as $70-80 per year in administration fees on a $50,000 balance, while slower funds often charge significantly more.
This revelation should prompt every Australian to reconsider what they're actually getting for their super fund fees—particularly those in retail funds charging premium prices for substandard service.
What this means for your family
The industry-wide changes triggered by regulatory action will benefit all Australians, regardless of which fund manages their super. However, the transition period means now is the perfect time to review your own arrangements.
The nomination reality check
Super Consumers Australia found that 36 per cent of Australians haven't made any death benefit nomination, while only 25 per cent report having binding nominations. Even more concerning, ASIC suggests the real number with binding nominations may be as low as 10 per cent.
Not knowing whether your nomination is binding creates serious risks—the fund may not pay your super to the person you intended, and additional delays are likely [13].
Protect your family now
- Check your current nomination status through your fund's website or app
- Ensure any binding nomination is still valid (they typically expire after 3 years)
- Consider whether your current nominations reflect your actual wishes
- Ask your fund directly whether your nomination is binding or non-binding
- Update beneficiary details after major life changes (marriage, divorce, births)
Age matters more than you might think
While death benefit nominations become more common with age, significant gaps remain—around 25 per cent of Australians aged 45-54 still haven't made any nomination, despite average super balances of $149,000.
For those approaching or in retirement, the stakes are even higher. Your super likely represents one of your largest assets, yet it's not automatically covered by your will.
The path forward
The regulatory crackdown on death benefit processing represents a watershed moment for Australia's superannuation industry. ASIC found that none of the reviewed trustees properly monitored their end-to-end claims handling times or performance - a basic business practice that most other industries would consider fundamental.
The changes at Cbus signal what the entire industry will likely need to adopt: simpler processes, digital-first approaches, and genuine accountability for processing times.
For Australian families, this means fewer bureaucratic hurdles during already difficult times. But the transition also creates an opportunity—and responsibility—for individuals to ensure their own affairs are in order.
What This Means For You
The message from regulators is clear: super funds must do better. But the message for individual Australians is equally important—don't wait for your fund to improve. Take control of your beneficiary nominations today, because when the time comes, your family shouldn't have to fight for what's rightfully theirs.
Have you checked your death benefit nominations lately? What changes would you like to see across the super industry? Share your experiences and thoughts in the comments below.
Original Article
https://au.finance.yahoo.com/news/c...ate-retirement-payouts-quicker-013116366.html
Pulse Spotlight: At least 6.5 million Australians won’t have a say in who inherits their super—superconsumers.com.au
Cited text: This translates to approximately 6.5 million super members (Trend toward single account, ATO, September 2024) who haven’t yet made a nomination, despi...
Excerpt: The numbers are staggering: approximately 6.5 million Australians with super haven't made death benefit nominations
https://superconsumers.com.au/resea...-wont-have-a-say-in-who-inherits-their-super/
25-049MR Super industry hit with long list of actions in landmark death benefit claims handling report | ASIC
Cited text: 78 per cent of claim files reviewed were delayed by processing issues within the trustee's control · 17 per cent of claim files reviewed had claimants who were experi...
Excerpt: ASIC's landmark review found that 78 per cent of death benefit claim delays were caused by processing issues entirely within the super fund's control
https://www.asic.gov.au/about-asic/...andmark-death-benefit-claims-handling-report/
ASIC sues AustralianSuper again over delays in death benefit claims | Super Review
Cited text: The corporate regulator alleges between 1 July 2019 and 18 October 2024, AustralianSuper failed to process death benefit claims efficiently, honestly ...
Excerpt: AustralianSuper alone delayed processing nearly 7,000 death benefit claims between 2019 and 2024, with some families waiting over three years, and one case dragging on for 1,140 days
https://www.superreview.com.au/news...nsuper-again-over-delays-death-benefit-claims
Compensation For Death Benefit Claim Delays | AustralianSuper
Cited text: Find the TMDs at australiansuper.com/tmd.
Excerpt: Cbus Super, which manages $100 billion for more than 924,000 members, was hit with ASIC action last year over delays affecting more than 10,000 death and disability claims, with estimated financial losses of $20 million to members
https://www.australiansuper.com/abo...compensation-for-delayed-death-benefit-claims
25-034MR ASIC sues AustralianSuper alleging significant death benefit claims failures | ASIC
Cited text: Last November, ASIC initiated civil penalty proceedings against United Super Pty Ltd, the trustee of Cbus, alleging delays in processing death benefit...
Excerpt: The regulator launched civil penalty proceedings against both Cbus and AustralianSuper within months of each other
https://www.asic.gov.au/about-asic/...ng-significant-death-benefit-claims-failures/
25-049MR Super industry hit with long list of actions in landmark death benefit claims handling report | ASIC
Cited text: ASIC has handed down 34 recommendations to superannuation trustees, with its report into death benefit claims handling revealing the devastating impac...
Excerpt: ASIC's report handed down 34 recommendations to super trustees, with Chair Joe Longo calling out 'excessive delays, poor customer service, and ineffective claims handling procedures' and demanding industry leaders 'take ownership of the…
https://www.asic.gov.au/about-asic/...andmark-death-benefit-claims-handling-report/
Compensation For Death Benefit Claim Delays | AustralianSuper
Cited text: AustralianSuper has started a program to compensate beneficiaries whose death benefit claims took longer than the Fund’s internal target handling time...
Excerpt: AustralianSuper has started compensating beneficiaries whose death benefit claims took longer than four months to process
https://www.australiansuper.com/abo...compensation-for-delayed-death-benefit-claims
Compensation For Death Benefit Claim Delays | AustralianSuper
Cited text: ‘We streamlined our approach to dealing with death claims and in December 2023 we announced a new Bereavement Centre, which opened in April with an in...
Excerpt: creating a new 75-person Bereavement Centre with dedicated case managers
https://www.australiansuper.com/abo...compensation-for-delayed-death-benefit-claims
Superannuation death benefit delays—you don’t get paid faster if you pay higher fees! - superconsumers.com.au
Cited text: Paying higher fees did not translate into getting better service. In fact, the funds that processed death benefits fastest had some of the lowest fees...
Excerpt: Research by Super Consumers Australia found no relationship between fees and death benefit processing speed—paying higher fees did not translate into getting better service.
https://superconsumers.com.au/resea...-dont-get-paid-faster-if-you-pay-higher-fees/
Superannuation death benefit delays—you don’t get paid faster if you pay higher fees! - superconsumers.com.au
Cited text: ... Avanteos, the trustee of FirstChoice Employer Super MySuper and Essential Super MySuper charges $70 per year admin fees on a $50,000 balance. Unis...
Excerpt: Some of the fastest-processing funds charge as little as $70-80 per year in administration fees on a $50,000 balance, while slower funds often charge significantly more
https://superconsumers.com.au/resea...-dont-get-paid-faster-if-you-pay-higher-fees/
Pulse Spotlight: At least 6.5 million Australians won’t have a say in who inherits their super—superconsumers.com.au
Cited text: Super Consumers Pulse 2024 has found that 36 per cent of Australians with superannuation say that they haven’t told their fund who should receive their super ...
Excerpt: Super Consumers Australia found that 36 per cent of Australians haven't made any death benefit nomination, while only 25 per cent report having binding nominations
https://superconsumers.com.au/resea...-wont-have-a-say-in-who-inherits-their-super/
Pulse Spotlight: At least 6.5 million Australians won’t have a say in who inherits their super—superconsumers.com.au
Cited text: · But the regulator has found that just one-in-ten people have a binding nomination, casting doubt on whether people understand the process.
Excerpt: ASIC suggests the real number with binding nominations may be as low as 10 per cent
https://superconsumers.com.au/resea...-wont-have-a-say-in-who-inherits-their-super/
Pulse Spotlight: At least 6.5 million Australians won’t have a say in who inherits their super—superconsumers.com.au
Cited text: Not knowing whether your death nomination is binding is a serious issue. In addition to additional delays, the fund may not pay your super to the pers...
Excerpt: Not knowing whether your nomination is binding creates serious risks—the fund may not pay your super to the person you intended, and additional delays are likely
https://superconsumers.com.au/resea...-wont-have-a-say-in-who-inherits-their-super/
Pulse Spotlight: At least 6.5 million Australians won’t have a say in who inherits their super—superconsumers.com.au
Cited text: The percentage of people making death benefit nominations increases with age; however, there is still a sizable cohort of over-45-year olds who still ...
Excerpt: While death benefit nominations become more common with age, significant gaps remain—around 25 per cent of Australians aged 45-54 still haven't made any nomination, despite average super balances of $149,000
https://superconsumers.com.au/resea...-wont-have-a-say-in-who-inherits-their-super/
Nominate a beneficiary
Cited text: Even though super is often one of the largest assets you own, it’s not automatically covered by your Will.
Excerpt: it's not automatically covered by your will
https://aware.com.au/member/super/access-and-manage-your-account/nominate-a-beneficiary
25-049MR Super industry hit with long list of actions in landmark death benefit claims handling report | ASIC
Cited text: While some trustees performed better than others, tellingly none of the reviewed trustees monitored or reported on their end-to-end claims handling ti...
Excerpt: ASIC found that none of the reviewed trustees properly monitored their end-to-end claims handling times or performance
https://www.asic.gov.au/about-asic/...andmark-death-benefit-claims-handling-report/
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