Super funds reject FOS model
A key superannuation industry body has sent the Government a clear message that it does not want to adopt the Financial Ombudsman Service (FOS) as its external dispute resolution (EDR) replacing the Superannuation Complaints Tribunal (SCT).
The Association of Superannuation Funds of Australia (ASFA) has used its submission to the Government's Review of the Financial System External Dispute Resolution Framework to make clear that while the SCT may have its shortcomings, superannuation funds regard it as preferable to the FOS.
In particular, the submission pointed to the lack of any ability to appeal directly from a determination of the FOS, with any potential court action having to be brought as an entirely fresh action and the lack of enforceability, "which has led to a substantial amount of determinations remaining unpaid — and consumers uncompensated".
The ASFA submission said the majority of the SCT's shortcomings were owed to its current and historic level of resourcing and funding.
The submission said ASFA believed there were a number of aspects of the current SCT model "which are so beneficial, in terms of the protections and rights provided to consumers and fund trustees, that they must be retained going forward".
It listed these as:
- The statutory tribunal structure, which provides clear independence from industry and from government and promotes consumer confidence;
- The absence of any monetary limit on access to the SCT or the redress that can be awarded by the Tribunal which is critical, given the compulsory nature of superannuation;
- The enforceability of determinations, which avoids issues of non-payment of determinations as is experienced with the FOS and, to a lesser extent, the CIO;
- The ability to appeal directly from a determination of the SCT to the Federal Court on a question of law; and
- Its specialist knowledge and expertise, which is vital given the often complex nature of complaints.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
