ASIC commissioner Simone Constant put the message plainly: super funds need to see their members as customers and engage with them accordingly — or risk court action. Treasury has been assigned the task of establishing mandatory service standards for the sector, to be enforced through regulation.

The warning reflects persistent, documented failures in basic service delivery across several of Australia's largest funds. The most complained-about issue lodged with the Australian Financial Complaints Authority (AFCA) in the last financial year was delays in handling insurance claims — including death benefit payments and total and permanent disability claims. Account administration errors and poor general service quality followed as secondary concerns.

The pattern of failure

The specific failures that attracted regulatory attention are not novel. Death benefit payments delayed for months or years after a member's death. Insurance claims rejected on technicalities then quietly reversed after members escalated to AFCA. Account balances incorrectly calculated. Beneficiary nominations not actioned. Members unable to reach a human being after extended hold times.

These failures matter more than administrative inconvenience suggests. A delayed death benefit payment is a financial crisis for a grieving family. A delayed income protection claim is a loss of income for someone already unable to work. The scale of the sector — $4.1 trillion in assets, millions of members — does not reduce the individual impact of these failures; it amplifies the total harm they cause.

"You need to see them and engage them as customers — or risk court action." — Simone Constant, ASIC Commissioner

Why this is a governance issue, not just a service issue

Both ASIC and APRA have signalled enforcement intent. This is significant. The regulatory framework for superannuation imposes a trustee duty on fund management: trustees are required to act in the best interests of members. Persistent failure to handle claims promptly, administer accounts accurately, and communicate effectively with members is not just poor customer service — it may constitute a breach of trustee duty.

The governance expectations being applied to the sector reflect its maturity and scale. A $4.1 trillion sector that manages the retirement savings of virtually every Australian worker is a systemically important financial institution. The governance standards appropriate for a small industry fund in 1985 are not the standards appropriate for what the sector has become.

What members should be aware of

The regulatory pressure is a prompt for super fund members to take a more active interest in how their fund performs — not just in investment returns, but in service quality and governance:

  • Check that your beneficiary nominations are current and binding, not lapsing
  • Understand what insurance cover you hold and what the claims process involves
  • Review whether your fund has appeared in AFCA complaints data or APRA performance assessments
  • Know how to escalate a complaint if your fund fails to respond adequately

For members with significant balances, or with family situations where the correct handling of death benefits and insurance claims is material, the difference between a well-governed fund and a poorly governed one is not academic. It has real financial consequences at the moments that matter most.