AustralianSuper, the country’s largest super fund, found itself in hot water when its backlog of unpaid death benefit claims skyrocketed from 700 to a staggering 4800 cases after the tumultuous aftermath of the COVID-19 pandemic. The Australian Securities and Investments Commission (ASIC) accused the fund of significant delays in processing these crucial claims due to what they termed as “highly inefficient” work processes stemming from outsourcing failures.
According to ASIC, AustralianSuper failed in its duty to provide financial services efficiently, honestly, and fairly, ultimately breaching obligations to promptly pay out members’ death benefits. The regulator highlighted how the fund continued charging monthly administration fees from deceased members’ accounts during prolonged delays, labeling this practice as unreasonable.
In response to ASIC’s allegations, an AustralianSuper spokesperson explained a shift in their approach concerning deceased members’ accounts. Previously charging administration fees for managing these accounts posthumously, the fund now invests them in its cash option upon notification of a member’s passing without continuing administrative charges.
The saga unfolded further as ASIC detailed Link’s struggles with handling death claims starting from May 2020, leading to the formulation of a plan to address the mounting backlog within AustralianSuper. Despite efforts to rectify the situation with a proposed recovery plan by November 2020, the backlog persisted and worsened into early 2021.
As months passed, projections for returning claim processing to normal levels fluctuated repeatedly between May 2021 and April 2022. By August 2022, frustration peaked as AustralianSuper admonished Link for failing to meet service standards punctually. Come October that year; the backlog had swelled to 4658 pending claims before escalating further by December.
Internally within AustralianSuper, mid-2023 reports revealed an alarming increase in pending death benefit claims now estimated at around 4800 cases. The inefficiencies stemmed from disparate technology platforms necessitating manual email exchanges for critical information needed in processing these claims.
Upon notifying ASIC about their predicament in September 2023, AustralianSuper faced additional criticism regarding deficient record-keeping practices and inadequate monitoring of outsourced performance among other accusations leveled against them by ASIC.
Despite these challenges, an optimistic note emerged with an assurance from an AustralianSuper representative that measures were being taken to improve claim management significantly. With over 70% of claims now resolved within a four-month timeframe upon receiving necessary paperwork initially; complex cases stand as exceptions awaiting essential information for completion.
This unfolding narrative underscores not just bureaucratic missteps but also sheds light on the human impact behind each statistic – families awaiting closure amidst administrative hiccups and regulatory scrutiny. As this saga continues its legal course with ASIC’s legal action casting a shadow over AustralianSuper’s reputation; it serves as a cautionary tale highlighting how operational inefficiencies can have far-reaching consequences affecting real lives beyond balance sheets alone.
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