ASIC warns super funds failing to address member complaints and systemic issues

Consensus Summary

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), has issued a stark warning to superannuation funds, accusing them of failing to address member complaints effectively. ASIC’s latest review examined 45 trustees overseeing $1.6 trillion in benefits for over 12.8 million members, revealing systemic failures in complaints handling. The regulator found that many funds were not adequately analysing complaints data to identify broader issues, leaving members vulnerable to unresolved problems. ASIC commissioner Simone Constant emphasized that superannuation funds must treat complaints as critical indicators of deeper systemic failures, warning that inaction could lead to legal consequences. The findings highlight a growing crisis in trust within the industry, particularly as members face delays in death benefit payouts and other critical services.

The issues uncovered by ASIC stem from long-standing problems in how superannuation funds manage complaints, particularly around death benefits and disability insurance claims. In March of the previous year, ASIC had already flagged excessive delays and poor customer service in death benefit claims, noting that these failures disproportionately affected vulnerable Australians during difficult times. The regulator’s October 2025 report further criticised funds for inadequate communication with retirees, underscoring a pattern of neglect in addressing member concerns. Despite these warnings, ASIC’s latest review found that close to one quarter of trustees—24 out of 45—failed to identify even five systemic issues from complaints over a two-year period, with 14 trustees detecting none at all. This suggests a widespread failure to learn from member feedback, allowing small problems to escalate into widespread harm.

Key figures in the debate include ASIC commissioner Simone Constant, who has repeatedly stressed the urgency of reform, and industry representatives like the Financial Services Council’s Blake Briggs, who acknowledged the need for improvement. Constant’s blunt remarks, such as 'blaming customers is not a complaint strategy,' reflect ASIC’s frustration with funds that attribute member dissatisfaction to individual complaints rather than systemic flaws. Meanwhile, the Australian Financial Complaints Authority (AFCA) reported a 42 per cent year-on-year increase in superannuation complaints for 2025–26, with claims-related issues rising by 80 per cent. AFCA’s data also showed it identified systemic problems at nearly twice the rate of the industry itself, further exposing the gap between fund performance and regulatory expectations. The Association of Superannuation Funds of Australia (ASFA) has pledged to act on ASIC’s recommendations, though the industry’s track record suggests meaningful change may be slow.

While both ABC and 7NEWS agree on the core issues—poor complaints handling, systemic failures, and ASIC’s intervention—they differ in emphasis and detail. ABC provides specific examples, such as a tax-related system problem affecting about 1,200 members and over 250,000 members struggling to access documents online, while 7NEWS focuses more broadly on the cultural and regulatory failures within the industry. ABC also notes ASIC’s threat of legal action and the government’s past announcement of mandatory service standards, whereas 7NEWS highlights the $5 trillion wealth transfer tax in the context of payout failures. These differences reflect varying priorities: ABC leans toward concrete cases of member harm, while 7NEWS frames the issue as a broader systemic risk. Despite these nuances, both outlets agree that the industry’s response to complaints has been inadequate and that urgent reform is needed to restore trust.

The immediate next steps remain unclear, though ASIC’s warnings suggest legal action could follow if funds do not improve. The industry’s peak bodies, including the Financial Services Council and ASFA, have acknowledged the need for change, but the pace of reform is uncertain. ASIC’s review also raises questions about whether the government’s proposed mandatory service standards—announced almost two years ago—will finally be implemented to address long-standing failures. Until then, members continue to face delays, poor communication, and unresolved complaints, leaving the superannuation system’s credibility in jeopardy. The coming months will likely see heightened scrutiny of individual funds, with ASIC and AFCA playing key roles in holding trustees accountable for their failures.