Annual Review 2023-24
Contents
- About this Annual Review
- Year at a glance
- Board Chair message
- Chief Executive Officer and Chief Ombudsman message
- Organisational overview
- Complaints
- Who complained to AFCA in 2023–24?
- AFCA Engagement with First Nations peoples
- Overview of complaints
- Open cases
- Closed cases
- Banking and finance complaints
- Buy now pay later
- Scam complaints
- Financial difficulty complaints
- Small business complaints
- General insurance complaints
- Significant events
- Life insurance complaints
- Superannuation complaints
- Investments and advice complaints
- Cryptocurrency
- Complaints lodged by consumer advocates and financial counsellors
- Complaints outside AFCA’s Rules
- Systemic issues
- AFCA’s Code compliance and monitoring function
- Engagement, awareness and accessibility
- Corporate information
- AFCA General Purpose Financial Report
- Glossary
Between 1 July 2023 and 30 June 2024
Superannuation complaints received
Top five superannuation complaints received by product
|
Product |
2019-20 |
2020-21 |
2021-22 |
2022-23 |
2023-24 |
|---|---|---|---|---|---|
|
Superannuation account |
3,723 |
2,717 |
3,009 |
4,369 |
4,391 |
|
TPD |
1,161 |
978 |
1,014 |
985 |
1,245 |
|
Income protection |
925 |
833 |
795 |
949 |
932 |
|
Death benefit |
578 |
453 |
457 |
599 |
708 |
|
Pension |
58 |
52 |
77 |
97 |
97 |
Top five superannuation complaints received by issue
|
Issue |
2019-20 |
2020-21 |
2021-22 |
2022-23 |
2023-24 |
|---|---|---|---|---|---|
|
Delay in claim handling |
1,260 |
856 |
737 |
1,738 |
1,730 |
|
Account administration error |
570 |
487 |
506 |
709 |
746 |
|
Service quality |
648 |
517 |
774 |
767 |
602 |
|
Failure to follow instructions/agreement |
375 |
227 |
302 |
337 |
419 |
|
Claim amount¹ |
- |
- |
- |
325 |
381 |
Superannuation complaints closed
Average time to close a superannuation complaint in days²
Stage at which superannuation complaints closed
|
Stage |
2019-20 |
2020-21 |
2021-22 |
2022-23 |
2023-24 |
|---|---|---|---|---|---|
|
At registration |
2,476 |
2,052 |
1,714 |
2,592 |
3,232 |
|
At case management |
3,646 |
3,375 |
2,697 |
2,948 |
3,924 |
|
At rules review |
254 |
168 |
177 |
190 |
289 |
|
Decision |
491 |
619 |
593 |
412 |
256 |
Time taken to close superannuation complaints
|
Time |
2019-20 |
2020-21 |
2021-22 |
2022-23 |
2023-24 |
|---|---|---|---|---|---|
|
Closed in 0-30 days |
1,117 |
770 |
681 |
819 |
943 |
|
Closed in 31-60 days |
1,285 |
1,363 |
1,342 |
1,966 |
2,511 |
|
Closed in 61-180 days |
3,355 |
3,051 |
2,096 |
2,331 |
2,864 |
|
Closed in 181-365 days |
1,013 |
762 |
636 |
794 |
1,118 |
|
Closed in more than 365 days |
97 |
268 |
426 |
232 |
265 |
Key complaint trends
Ongoing challenges in the superannuation system
In 2023-24, AFCA received 7,325 superannuation complaints, a 5% increase from the previous year. Despite this rise, superannuation complaints have consistently accounted for about 7% of our total complaints, highlighting ongoing challenges within the superannuation system.
Account administration complaints remain prevalent
Account administration issues led the complaints, with 4,391 cases reported a 1% increase from the previous year. These complaints typically involve delays in rollovers and withdrawals, errors in investment switches, and difficulties with online services.
Total and permanent disability (TPD) insurance complaints increase significantly
Complaints about TPD insurance rose by 26%, totalling 1,245 cases. This category includes complex issues such as eligibility disputes, delays in decision-making and detailed medical assessments.
Resolution and timeframes
Early resolution efforts
42% of superannuation complaints were resolved at the Registration and Referral stage.
Extended resolution times reflect complexity
Superannuation complaints are notably complex, with trustees given 30 days for initial resolutions, 45 days for other complaints, and 90 days for death benefit distribution complaints. Despite these extended timelines, 12% of cases were resolved within 30 days and 33% between 31 and 60 days. Only 3% of cases exceeded a year to resolve.
Industry trends and challenges
Technological advancements and cyber risks
Technological advancements are reshaping the superannuation landscape, offering potential for improved member services and complaint handling through enhanced digital interfaces and automated processes. Many funds are improving the functionality and sophistication of their member portals and on-line services. However, these advancements also bring risks, such as increased vulnerability to cyber fraud. While complaints about scams and fraud within super remain low, AFCA is very concerned there are signs that cyber-criminals are beginning to turn their attention to the superannuation industry, and we strongly urge trustees to strengthen their safeguards against this activity.
Communication and member education
AFCA finds that many complaints can be traced back to unclear or inadequate communication and disclosure, and a mismatch between member expectations and the services and products offered by their fund. Ongoing member education is crucial to prevent misunderstandings, ensure that members have a realistic understanding of the services and benefits offered by their fund, and reduce the volume of complaints.
Case study – Inadequate verification and superannuation fraud
Background
A superannuation fund member was entitled to a TPD benefit under their superannuation fund. This benefit was to be paid into the trust account of their solicitor, as part of the standard procedure for managing such payments.
Complaint
AFCA received a complaint from the fund member after they discovered that the expected TPD benefit had not been received. Upon investigation, it was revealed that the payment had been directed to an account controlled by a scammer. The scammer had gained access to the solicitor’s email system, most likely through phishing techniques, and sent a fraudulent email to the superannuation fund. This email falsely claimed to be from the solicitor, providing altered bank account details for the payment. As a result, the benefit was mistakenly paid into the scammer’s account rather than the intended trust account.
Outcome
The AFCA case manager reviewed the situation and found that the trustee of the superannuation fund had failed to verify the new bank account details with either the solicitor or the member. Instead, the trustee accepted the email instructions at face value without appropriate confirmation. AFCA’s preliminary assessment was that the trustee’s actions did not meet the professional standard expected of a prudent trustee. In response to the complaint, the trustee agreed to compensate the member for the financial loss incurred due to the fraudulent activity.
Case study – Classifying invalidity benefits
Background
The complainant was ‘let go’ from his job on 30 November 2007. Later, the trustee of his superannuation fund decided that, based on his health issues, he could have been officially considered ‘retired’ due to invalidity as of that date. This means that they believed his health problems were severe enough that he should have been receiving benefits for being unable to work.
He returned to work briefly on 7 July 2008, but was let go again on 8 July 2009. The trustee then determined that he could have also been considered ‘retired’ on this second date due to the same health problems.
When he applied for his benefits, the superannuation fund used a system to classify the severity of his incapacity into different levels: Class A, Class B or Class C. On 3 September 2021, the trustee decided that he should be classified as Class B, meaning they assessed his incapacity at 30% for both of the discharge dates. This classification was based on various health issues he had. Additionally, the trustee later reclassified him to Class A, starting from 10 May 2018, which reflects a different level of severity for his incapacity.
Complaint
The complainant disagreed with how the trustee rated his invalidity benefits. He believed that based on his health issues and the severity of his condition on 1 December 2007 and 9 July 2009, he deserved to be classified as Class A, which provided a higher level of benefits. He thought his impairments were significant enough to qualify for this higher classification. Despite asking the trustee to reconsider and upgrade his classification, the trustee decided to keep him at Class B, their original decision, when they reviewed his case again on 30 September 2022.
Outcome
The panel reviewed the complainant’s case and looked at his health issues as of 30 November 2007 and 8 July 2009. They confirmed that on 30 November 2007, his impairments included issues like Bilateral Anterior Compartment Fasciotomies, right shoulder pain and post traumatic stress disorder. By 8 July 2009, he also had left wrist pain and other issues.
After evaluating all of his health issues, the panel agreed that his level of incapacity matched the Class B category, which is 30% or more but less than 60%. They found that this classification was fair based on his condition at the time. Therefore, they supported the trustee’s decision to keep him in Class B rather than moving him up to Class A.
