CHRIS O'KEEFE:
Well, you'll remember last week that I did speak about superannuation and – I call them ridiculous delays, but I think it goes beyond that. In some cases they were cruel delays being dished out by super funds when people were trying to access the death benefit from a family member. Now, obviously, grieving the loss of a loved one is hard enough, yet you got cases of people being forced to go through absurd amounts of paperwork and wait months, if not years in some cases, to get the money that they're owed. Now, I spoke with a listener, Linda. She lost her husband of 50 years, Brendan, at Christmas last year. And Linda had an absolute nightmare trying to deal with Australian super.
CALLER:
Australian super was nearly 5 months. They just wouldn't return phone calls, and they kept on asking for more information. One stage they wanted me to – my sons to – sign a piece of paper saying that they weren't going to contest the will. I actually put the comment out on their page, and they didn't reply to that. They just said, we'll look into it, but nothing ever happened.
O'KEEFE:
So, that's Linda. And she only got her money back when she did a TV interview with Jonathan Lea at Sky News. Now, that is just despicable. And when Australian Super got a bad wrap publicly, they finally get the money to Linda, money that she's owed and she's entitled to. Right in the midst of trying to deal with the grief of losing her husband of 50 years. Seriously? Is that what it takes, a television interview? And it's not just Australian Super, it's being done by a stack of the big superannuation funds. And largely it is industry super funds. The union-backed super funds, to be honest. The Australian Financial Complaints Authority, or AFCA, says complaints over super delays have tripled in the last financial year. And we got overwhelmed with emails when we spoke with Senator Andrew Bragg about this on Friday.
Listener John. So, John lost his son twelve months ago, and BT Super just simply won't answer his calls. Sally lost her husband in August, and Equip Super is sitting tight on her money. Jeff lost his brother back in 2006, and his brother's children have given up trying to access his super from Cbus. It's been 17 years. Look, I don't blame them. It's hard, and it's emotionally taxing, and I think it is just a disgrace. Senator Bragg is calling for an inquiry into superannuation. 131873 is my number. Get in touch if you've got similar stories of super funds making it nigh on impossible to get your hands on a loved one's money, money that you're entitled to after they've passed away. We had a story about someone who has asked for a death certificate for the third time. So, three different types of death certificates. There is only one. Three copies. Well, I'm pleased to say that the person responsible for superannuation in Australia, Assistant Treasurer and Minister for Financial Services Stephen Jones, is on the line for us now. Minister, thank you for coming on.
STEPHEN JONES:
Good to be with you, Chris.
O'KEEFE:
Some of these stories are unbelievable.
JONES:
They are. And I've put the industry on notice that it's unacceptable. I first started raising with them in December last year. I told them, you've got a year to get your act in order. The service standard that members are experiencing through their superannuation funds. And frankly, it's right across the board. There's no great sector, to be honest, whether it's industry or retail, there's no great sector. No one's kicking it out of the park. They're on notice. They got to lift their games. Otherwise, they can expect some regulatory intervention here where we'll be lifting – by force – the standards across the board. I don't want to do it, frankly. I mean, I heard the stories you raised in your intro. The idea that somebody is at one of the most tragic and difficult times in their life, the death of a loved one, is then having to wrangle for money out of an insurance policy is just not acceptable. It's not acceptable.
O'KEEFE:
What's the reason that the super funds are giving you? Why they're taking so long?
JONES:
Look, when I talk to them, they all say, well, we're alright, but we know there are problems with other funds.
O'KEEFE:
Course they would.
JONES:
And I go, well, if everyone's saying the same thing, then everyone's wrong. And like I said, when I look around the scorecard, there's nobody that's brilliant. And in relation to insurance, which does take up a lot of their claims, they'll often say, well, we've outsourced the administration, or that's a contract with the insurance company, and the insurance company is the one that is being difficult about it. My response to that? I don't care. The obligation is on the trustee to deliver what they have contracted with the insurance company to deliver. So, it's the trustees of the fund who are ultimately responsible for this, and they got to improve their procedures, not just me saying this. The regulators did a deep dive into this a little while ago and came up with the same response.
O'KEEFE:
You know what? I've been ringing people who are in the industry. And look, would I say they're whistle-blowers? No, but they certainly gave me a little bit of background as to what is actually going on. The longer the money stays in the super account. Stephen Jones. The more money they make on dividends, the more money they make on their investments.
JONES:
Thats kind of, that might be for the – I actually think it's something more fundamental, can I say. And it goes like this: like superannuation, universal super, set up about 30 years ago, they've actually done a really good job of growing people's wealth. Average return 7 to 8 per cent per annum over that 30-year period. But what they haven't done a good job – and they've had a very passive relationship with their members – what they haven't done a good job of is the member engagement, the member relationship.
Now, we've got about 5 million Australians who are either at or approaching retirement. They are now going to be expecting far much more from their funds than they've ever received in their life. Funds have got to lift their game. They've got to get on board and improve the services.
O'KEEFE:
I think you're being a bit kind. Australian Super. I hate to say it, but Australian Super, from the complaints that we've received, and I'm talking – we've received dozens – Australian Super is by far and away the most complained to us here on 2GB. You could pick the phone up to Michele O'Neil. She's the president of the ACTU, and she's on the board. Right?
JONES:
Look, I've done better. I've had direct and very blunt meetings with the CEO of Black Fund and others.
O'KEEFE:
Have you spoken to Michele O'Neil, the president of the ACTU, also on the board of Australian Super?
JONES:
No, but I have spoken to the chairperson of the board, and I've spoken to the CEO of Australian Super. They're the appropriate channels of communication.
O'KEEFE:
What about Cbus? Have you spoken to Wayne Swan, your old mate? He's the chair.
JONES:
Again. I've spoken to the chair and the CEOs of all the major funds.
O'KEEFE:
What did Wayne Swan tell you? Did he say "Oh sorry you know. Look, it's everyone else's fault", like you just told us before?
JONES:
I think Wayne, to his credit, understands that this is a significant issue that his fund and every other fund across the country has got to do a lot better on.
O'KEEFE:
Nicola Roxon, she's the former Health Minister, she's the chair of Hesta. We received a couple of complaints about Hesta. Have you spoken to Nicola Roxon, your former colleague?
JONES:
No, I haven't, Chris, but I have spoken to the CEO of Hesta, which is appropriate and made my views known to the CEO of Hesta, as I have with AMP, as I have with Insignia, as I have, in fact, with a whole range of the funds.
O'KEEFE:
But you could see how the. No, well, you could see how the public would be sitting back going "Geez, this all looks a little bit cosy", Stephen Jones. It's all very Labor, it's all very union, and ultimately, it's the members who are being dudded out of money they're entitled to.
JONES:
Well, like I said, I first raised this before anybody was talking about it in December last year, when I had made available to me a report that showed there were significant problems. You weren't talking about, nobody else was talking about it. I started saying to the funds, "This isn't good enough. You've all got to lift your game." And I've done that several times, including the article you've referred to in the Australian Financial Review yesterday, where I've said, you've got twelve months to lift your game. And if you don't meet the appropriate standard, then there'll be regulatory standards.
O'KEEFE:
Okay, what does that look like? What do the regulatory standards look like?
JONES:
Some really basic stuff, Chris, like minimum timelines for dealing with sorts of death [indistinct].
O'KEEFE:
And if they don't meet those minimum timelines, what is the consequence?
JONES:
The sort of action that is being imposed upon Telstra Super by the ASIC at the moment, where they're being prosecuted for not meeting even the existing standards in relation to dealing with member complaints, we want to ensure that the regulators have the appropriate stick and the appropriate tools available. Can I just make one other thing – say one other thing in relation to dealing with this? All of your listeners and all of those people that you referred to who have raised concerns and are not satisfied with the response they're getting, the Australian Financial Complaints Authority has been established to deal with. It's a tribunal which has been established to deal with superannuation complaints and other finance services complaints. And I would encourage your listeners to utilise that facility.
O'KEEFE:
That's AFCA. I appreciate you coming on. Assistant Treasurer Stephen Jones. I do appreciate your time. Just quickly, when is the deadline for these super funds to get their act together?
JONES:
In December last year, I said, you got 12 months.
O'KEEFE:
All right, so they've got, what, 4 to 6 weeks before you either get the big bat out or give them the green light?
JONES:
No, there won't be green lighting to the current level of service. I've made that very clear.
O'KEEFE:
When you make up your mind, come back on the radio and tell us how you're going to clamp down on them because people are just beside themselves that they've got to go through this at times of grief. It is really unfair. Stephen Jones, thanks for your time.
JONES:
Good to be with you.