Financial Services Minister Stephen Jones announced on Tuesday that the government intends to lift the bar for member service in superannuation by introducing mandatory and enforceable service standards for all large Australian Prudential Regulation Authority (APRA)‑regulated superannuation funds.
“The new standards will improve how funds engage with their members and put member interests at the heart of service delivery,” Jones said.
The standards will initially target three critical areas where complaints data shows the greatest need for improvement, including the area of death benefit claims, insurance claims and member communication.
“Treasury will work closely with consumer advocates, regulators and industry stakeholders to develop the standards. Draft standards will be released for public consultation,” the minister said.
He noted that while the reform aligns with the newly legislative objective of super, it also complements the government’s retirement phase of super reforms and the Delivering Better Financial Outcomes package.
“With this reform, the Albanese government is making sure the superannuation system not only delivers financial security for retirement but does so with fairness and dignity for members along the way,” he said.
Responding to the announcement, Aware Super’s CEO said the fund “welcomes the development of strong, consistent and industry-wide service standards”.
“It is pleasing to see the government acknowledge the need for a clear and comparable set of standards, and we look forward to working with the government, industry and consumer groups to ensure the standards are robust and meaningful for members,” Deanne Stewart said.
Stewart said choice was important in superannuation and it should be easier for consumers to compare funds and see clearly how well they served their members.
“The ability of a superannuation fund to provide service and support can make a profound difference to key moments in people’s lives,” she said.
Similarly, the CEO of the Australian Retirement Trust, David Anderson, said the announcement is “a step forward for the sector to ensure Australians’ retirement investment is managed with the standard of service and care Australians expect and deserve”.
“We look forward to working with the government, consumer advocates, regulators and the broader superannuation industry to develop the standards and ensure all Australians receive financial security for retirement with fairness and dignity,” Anderson said.
Also commenting on the announcement, Association of Superannuation Funds of Australia (ASFA) CEO Mary Delahunty acknowledged that consumer expectations of service standards have not always been met and highlighted steps ASFA and the broader sector have taken to improve service standards and member outcomes.
“We welcome the government’s focus on strengthening member outcomes and stand ready to lead the sector’s response to the consultation in collaboration with other stakeholders on the development of these essential service standards,” Delahunty said.
Similarly, the CEO of the Super Members Council said mandatory service standards will ensure millions of Australians get the service they deserve.
“Super funds have tens of millions of interactions with their members every year, and members expect those interactions to be timely, responsive and clear,” Misha Schubert said.
“We look forward to working with the government to ensure the new mandatory standards improve the experience when members are dealing with their fund – often on complex and challenging issues.”
Council of Australian Life Insurers CEO Christine Cupitt added that the announcement would strengthen service standards within super.
“Life insurance works hand in hand with super to protect people’s nest eggs and allow them to have a dignified and financially secure retirement if they can’t live a full working life,” Cupitt said.
“For many people, the life insurance they have in their superannuation is the only type of cover they have or will ever have.
“People rightly expect their life insurance claims to be dealt with quickly and efficiently.”
While pleasing that the super village are all in furious agreement and support for mandatory minimum service standards, it begs the question, why haven’t these funds and peak bodies already taken action to self solve for this? It’s a bit embarrassing for the sector that the government has had to wade in and dictate what basic service looks like and needs to be consistently achieved.
Enforced with the voracity of being stroked by a warm lettuce leaf.