Super is Australia’s ‘economic future’, ASIC says

Following various cyber attacks hitting a number of super funds last year, ASIC is emphasising the urgency for trustees to remain “on the ball” when it comes to protecting the retirement savings of Australians.

This call was made in a speech at the Conexus Super Chair Forum last week (4 February), by ASIC commissioner Simone Constant, who said the corporate watchdog had seen up to 9,000 member accounts impacted by cyber attacks, with more than half a million dollars stolen.

“I think it was an important reminder of just how big a business superannuation is now. Around $4.5 trillion in assets as of last September. That makes it a very big target for bad actors. It also means it now comes with very big obligations,” she said.

“And if you want to meet these obligations to members and markets, your size means you actually now need to think differently about your role in the system.”

According to Constant, this needed to be taken seriously as the industry had projected the national super pool to be approaching $6 trillion by 2030, on par with where the banks sat today.

“So, it’s not a moonshot to say that super will one day – and one day not too far away – be the biggest part of our economy,” Constant said.

“That will make you stewards of more than Australia’s retirement future – but our economic future too. Custodians of stability and confidence.”

This followed an ASIC investigation and survey, which discovered there were still "growing pains” in how trustees used complaints to identify and address service issues.

According to ASIC, though still in the early days of the review, it had become obvious that some trustees were ahead in terms of how they identified issues from complaints, while others lagged.

It was found that five in 10 trustees had not identified a single systemic issue from analysis of their complaints data over the review period, with at least one trustee failing to analyse their complaints data at all.

“Why does this matter? Well, aside from it being an enforceable requirement to regularly analyse complaint data, complaints are, of course, a free source of intelligence. You don’t need an expensive consultant to tell you you’ve got a problem,” Constant said.

“Your customers are telling you, loud and clear, through complaints. And listening and responding to them is customer service 101.”

“What’s become really clear to me over the past few years is that right across the superannuation system and sector there is a need to invest in governance, capability, skills, systems, and operations to deliver on the promise of super to Australians and move towards better practice.”

It was noted by Constant that while ASIC was urging trustees to be more “on the ball” for the benefit of the Australian economy and retirement savings, the corporate regulator was aware of the complex challenges faced by trustees.

Despite this, there was still “low-hanging fruit” and really basic areas where trustees could perform better, to ensure they were protecting the money and trust they held for their members.

Looking forward, ASIC said it would continue to look into how trustees used complaints to identify and drive systemic improvement, review of death benefits, disrupting harmful superannuation switching behaviours, and holding trustees accountable for the implementation and delivery of the retirement income covenant.

In addition, ASIC was set to continue to drive transparency and consistency in fair outcomes in all capital markets, superannuation financial reporting and audit surveillance to once again, ensure confidence and transparency.

“Our enforcement focus will continue to be holding super trustees to account for member service failures,” Constant said.

“We are all one system. Every part of the system has its gaps – platforms, industry, retail, specialists, everyone. And it will require action from everyone – from all of us – to address.”