First Nations advocates have urged political leaders to commit to mandatory customer service standards in the wake of an Australian Securities and Investments Commission report on superannuation claims revealing widespread delays and distress, particularly for First Nations families.
Despite handling billions in retirement savings, advocates noted on Monday, most super funds still don't know which of their members are First Nations, making it impossible to provide fair, culturally appropriate services.
ASIC's report revealed First Nations claimants faced longer wait times, were difficult to access for people in remote communities, and poor communications including ineffective websites and missing paperwork.
Poor oversight of claims handling processes by trustees has led to claims handling delays and failures.
"Trust is key to super trustees. We give them our money in good faith - but they fail us," said Mark Holden, Mob Strong Debt Help Senior Solicitor and Policy Advocate.
"Super funds do a great job collecting our money, but let us down when it matters most - when we've lost someone, when we're grieving, and when we need access."
Major failures identified include:
- Death benefit claims in remote communities are processed disproportionally slower;
- Super funds simply don't know if they have First Nations or vulnerable members who may require additional assistance to make a claim;
- Super funds unnecessarily delayed Sorry Businesses by engaging in risk averse activities, causing harm to First Nations peoples families awaiting payments for loved ones, including where a binding nomination was in place;
- Super funds unnecessarily delayed Sorry Business by engaging in unnecessarily risk averse activities, causing harm to First Nations peoples families awaiting payments for loved ones, including where a binding nomination was in place; and
- Culturally unsafe practices by super funds create a barrier to First Nations people accessing and making claims to their fund.
"This inequity is unacceptable," Mob Strong Debt, the Indigenous Consumer Assistance Network, Indigenous Consumer Assistance Network and Financial Counselling Australia noted in a joint statement on Monday.
The advocates questioned how Closing the Gap could be accomplished when families "can't even fairly access what is already theirs".
The advocates called for "mandatory, legislated customer service standards which should include: clear processing timeframes, a requirement for culturally appropriate, plain language communication, and cultural competency training for staff".
"Regardless of who forms government after the election, the next Assistant Treasurer must ensure the superannuation system delivers on its core promise—especially for those who have been failed the most," they said.
Mr Holden said ASIC report suggests Trustees "are not meeting their obligations to make reasonable efforts to find beneficiaries and make payments".
"The ASIC report shows that funds across the board are effective at taking our money, but are not consistent or fair in giving it back when sorry business happens," he said.
"This is a critical moment for the superannuation industry. The treatment of First Nations fund members shows the urgent need to legislate guaranteed member standards. We applaud ASIC for shining a light on these practices".
Bettina Cooper – Mob Strong Debt Help Senior Financial Counsellor and Strategy Lead, said Closing the gap on intergenerational wealth is being prevented because of "the unreasonable barriers on First Nations people accessing our superannuation and death benefits".
"Funds need to wake up and identify and help vulnerable consumers".
Indigenous Consumer Assistance Network Senior Financial Counsellor Unaisi Buli said: "A set of standards across the superannuation sector that recognise and address cultural barriers, would facilitate easier access for First Nations peoples."
"When our clients need to access their super early, which is their own hard-earned money, superannuation companies put up a multitude of barriers that make accessing this super extremely difficult and a demoralising experience. These experiences actually turn our clients away. In the case of one Cape York client who was denied access to his super under financial hardship, the only thing that he could do to access his super was to move it to another company that had a different set of rules."
Indigenous Consumer Assistance Network (ICAN) chief executive Aaron Davis said: "For many of our clients, superannuation is seen as a modern form of stolen wages, as it's basically money saved that can't be accessed when it is needed most. The very fact that superannuation rules don't take into account the gap in life expectancy for First Nations people shows a lack of consideration in design."
Lynda Edwards, Director of First Nations Policy at Financial Counselling Australia said financial counsellors "are forced to jump through endless hoops to help First Nations clients access superannuation that's rightfully theirs".
"The system isn't just slow - it's failing people when they need it most. Super funds need to ensure the super of deceased loved ones is accessible to their next of kin without delay," she said.
