The Australian Securities and Investments Commission (ASIC) has raised significant concerns over the ongoing failure of superannuation funds to properly handle member complaints, highlighting systemic shortcomings that put members at potential risk. The watchdog’s review, covering a two-year period up to mid-2025, revealed that many funds are not adequately analysing complaints to identify broader issues, an essential activity for early problem detection and risk management.
ASIC commissioner Simone Constant stressed that complaint handling is crucial for understanding service breakdowns, errors, delays, and risks such as fraud. Despite this, the regulator found that nearly a quarter of the super funds in the sector failed to frequently assess complaints for systemic themes, with 14 trustees identifying no systemic problems at all. Among major funds reviewed, half identified fewer than five systemic issues over two years, even though the Australian Financial Complaints Authority (AFCA) recorded twice as many systemic concerns during the same period.
Some funds were criticised for attributing complaints predominantly to member error, awareness, or expectations, rather than acknowledging possible flaws within their own systems. For instance, one fund left around 250,000 members unable to access online documents for years despite repeated complaints, only addressing the issue when a staff member experienced the problem firsthand. Another fund discovered in 2024 that it had failed to pay retirement bonuses to 500 members over six years, a shortfall totaling $1.3 million; as of May 2026, the fund had not fully resolved the issue or identified all affected members.
ASIC warned that the sector’s immature approach to complaints handling and risk management may lead to repeats of past crises, including the well-publicised death benefits scandal involving large funds such as AustralianSuper and Cbus. Following lawsuits last year by ASIC over delays in death benefit claims, attention has turned to ongoing deficiencies in protecting members from service breakdowns, scams, and fraud. The regulator urged trustees to urgently address these cultural and operational gaps, emphasising the heightened risks arising from industry disruption and a challenging strategic environment.
Responses from the superannuation sector varied. AustralianSuper highlighted its recent move to internalise complaints management as a step toward quicker and fairer resolutions, adding that this change supports broader efforts to enhance member service through digital investment and improved contact centre operations. The Association of Superannuation Funds of Australia (ASFA) acknowledged the reported shortcomings and stated it would collaborate with funds to develop consistent approaches for analysing complaints and addressing systemic issues. The Financial Services Council (FSC), representing retail profit-for-purpose funds, welcomed the focus on systemic risks and called on the government to prioritise the implementation of mandatory service standards announced nearly two years ago.
Industry representative groups in both the profit-for-purpose and retail sectors emphasised the importance of using complaints data to drive continuous improvement and prevent harm to members. Despite this, ASIC’s findings underscore a gap between regulatory expectations and actual practice across a significant portion of the superannuation sector, raising questions about the readiness of some funds to navigate emerging risks while effectively serving their members.