GIVEN the millions of super fund members, the number of complaints reaching the Superannuation Complaints Tribunal is extremely low.
For example in the latest June quarter, the tribunal received just 661 written complaints – with only 425 of these falling within the tribunal’s jurisdiction.
This small number of complaints suggests that either few people have complaints about super funds or the funds’ internal complaints procedures are operating extremely smoothly – or most likely a combination of both.
Numerous fund members, no doubt, would be disappointed with the performance of their funds in recent years – given the GFC and the savage bear market – but that, of course, does not constitute grounds for making a complaint.
Despite the relatively few complaints to the tribunal, few would argue that its role is not vital. It is essential that fund members and would-be beneficiaries to super death benefits know they have a means to complain if satisfaction cannot be gained through a fund’s own processes. And this factor, in turn, would lift standards within funds.
Another key benefit flowing from the tribunal is that it gives both fund members and the funds themselves an impression of what issues are most likely to cause problems.
If you ever have a complaint about a superannuation fund, there is a good chance that it will be about how trustees decide that super death benefits should be distributed.
The law regarding the distribution of super death benefits is complex and fund trustees can have discretion within that law. (There are certain exceptions to the trustees’ discretion.)
And the families of deceased members sometimes look upon super death benefits as a form of inheritance to which they feel entitled.
Almost 35% of the complaints within the tribunal’s jurisdiction received in 2009-10 concerned disputes over the distribution of death benefits – a significant rise in percentage terms from 2008-09. (These are unaudited figures; the tribunal’s latest annual report has not yet been released.)
And as highlighted during the GFC and its aftermath, complaints about fund administration – such as the time taken to switch between investment options or between super funds – can be markedly higher when markets are falling or highly volatile.
Even though the total number of complaints to the tribunal is low compared to the millions of fund members, it should be noted that it still has to give decisions each quarter in scores of cases.
To read about the tribunal’s complaints processes and some of its decisions, see http://www.sct.gov.au/.
Robin Bowerman, Vanguard Investments Australia's Head of Retail, has more than two decades of experience in the finance industry as a writer, commentator and editor.