(Bloomberg) -- Australia’s pensions regulator has put the nation’s A$3.9 trillion ($2.5 trillion) industry on notice over the handling of death benefit claims, just days after it sued one of the largest funds for unacceptable delays.
In a letter to pension fund chiefs, the Australian Securities and Investments Commission warned of “consistently weak trustee practices” to prompt immediate action on claims and failure to gather and analyse data related to members’ outcomes.
“While this letter focuses on death benefit claims handling, many of the insights are equally applicable to the governance of other member services provided by trustees,” ASIC Commissioner Simone Constant wrote.
ASIC last week filed civil proceedings against A$94 billion fund Cbus over lengthy delays in handling death benefits and insurance claims. Cbus is alleged to have taken more than 12 months to process some of the claims, which impacted over 10,000 people with an estimated A$20 million in financial losses.
Australia’s fast-growing retirement system is seeing mounting concerns about funds’ standard of customer service, with 2.5 million people expected to retire in the next decade. ASIC is undertaking a review of industry practices and compliance with laws relating to trustee administration.
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