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Service with a smile: Complaints against super funds drop dramatically

August 11, 2021

Service with a smile: Complaints against super funds drop dramatically

The number of complaints made about Australia’s $3.1 trillion superannuation system dropped by nearly a third in the 2021 financial year, new data shows.

The number of complaints made about Australia’s $3.1 trillion superannuation system dropped by nearly a third in the 2021 financial year, new data shows.

The Australian Financial Complaints Authority (AFCA) – the government entity established in 2018 to handle complaints against most financial institutions – revealed grievances with super funds dropped from 7557 in 2019/20 to 5246 in 2020/21.

That represents a drop of 29.6% for the year.

AFCA noted that many of the complaints they did receive in the past financial year came from members concerned about changes to the level of insurance coverage provided through their fund.

Historically, fund members were automatically covered by life, total and permanent disability (TPD), and income protection group insurance policies offered through the fund.

More recently, reforms designed to bolster superannuation savings by trimming unnecessary costs mean some fund members – those under 25 years old or with balances under $6000 – have to ‘opt in’ to keep or receive this insurance coverage.

Unfortunately, this meant some members tried to make claims only to learn they weren’t covered by their fund’s group insurance policies.

A failure to communicate

Interestingly, most of the complaints made to AFCA about insurance coverage came from people who either weren’t properly notified of the changes by their fund, or who had not read or properly understood the notice they were given.

AFCA did not provide detail on how many of these complaints were received.

Other common grievances included 451 cases where someone tried to claim life insurance after the passing of a loved one only to find they weren’t covered, and 978 complaints relating to TPD insurance.

 

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Sources:


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