ASIC urges superannuation trustees to fix weaknesses in detecting systemic issues from complaints

The Australian Securities and Investments Commission (ASIC) has published Report 844 on superannuation trustees’ use of complaints, urging them to address weaknesses in detecting and resolving systemic service failures. The report details the complaints review previewed in August and follows earlier death benefit claims work that found trustees had not always acted on warning signs before problems became widespread. Information collected from all 45 trustees regulated by ASIC showed that nearly a quarter were not regularly analysing complaints for systemic issues. Over two years, 24 trustees identified fewer than five systemic issues, including 14 that identified none. ASIC regards low identification as a potential warning sign, particularly where trustees have high complaint volumes or large membership bases. The Australian Financial Complaints Authority identified systemic issues from complaints at almost twice trustees’ rate over the same period. A deeper review of 10 trustees also found several too readily attributed complaints to members’ expectations, awareness or errors rather than examining potential service failures. Under ASIC’s enforceable internal dispute resolution standards in Regulatory Guide 271, trustees must record all complaints, analyse complaints data for systemic issues and escalate possible problems for timely investigation and rectification. Trustees should promptly review the report’s recommended actions and improve their arrangements. ASIC warned that failure to address weaknesses that expose members to harm could prompt regulatory action.