There's a set process to follow if you're unhappy with your super fund. Source: National Features
THOUSANDS of Australians are unhappy with their superannuation and complaints are once again on the rise.
Almost 14,000 people contacted the Government's Superannuation Complaints Tribunal last financial year about their managed super funds. A similar number of disgruntled savers is estimated from the self-managed sector, as they switch or sue their advisers, but have nowhere to make a formal complaint.
So what can you do if you are unhappy with your super fund?
According to the Superannuation Complaints Tribunal, the starting point for the average super fund member is always the fund manager.
Tribunal chairman Jocelyn Furlan says of the 13,900 calls to the government organisation last year, the vast majority were from people who had to be referred back to their super fund to kick-start the complaint process.
Even within the 2619 formal written complaints to the tribunal about 1000 of them still had to be sent back to the fund to give it an opportunity to resolve the problem first.
If after 90 days the fund does not respond or it gives a response the person is not happy with, then the issue can be taken up by the tribunal.
However, Furlan says that in thousands of cases every year the issues are solved by the fund.The tribunal had a 3 per cent rise in phone complaints and a 6.5 per cent increase in written complaints in the year to June 2012, compared with 2010-11.
"The increase in complaints hasn't been triggered by a specific event," she says.
"It appears to be a combination of more awareness, higher account balances and the surge of Baby Boomers hitting retirement age."
The tribunal's biggest area of disputes are about decisions by trustees, particularly to do with benefit amounts and payments, insurance and death payouts.
It does not make judgments on investment performance which is one of the areas of dispute for many people.
> Investment performance
Independent research company SuperRatings says the difference between the best-performing super fund and the worst is typically about 6 per cent a year. That can add up to $200,000 at retirement.
"But don't take too much notice of the one-year performance returns," SuperRatings founder Jeff Bresnahan says. "It's much more important to look at a five or seven-year period.
"If your fund consistently underperforms for the type of investment option it is, then that's a catalyst for change.
"To put it in simple terms, a difference of 6 per cent a year between the best and worst fund is either retiring with $400,000 or $600,000 you decide," Bresnahan says.
> Switching funds
If you're not happy with your fund, it's often a slow and complicated process to switch.
"It's incredibly difficult to switch funds, they put road blocks up in your way at every step," Bresnahan says.
"You have to be very persistent because some funds will try every trick in the book to hold on to that money.
"They say this form is missing, or that form never arrived or it was incorrect, you just have to keep at it. Get your new fund to undertake or help with the roll-over," he says.
> Slow to complain
Hospitality and tourism super fund Intrust Super says most Aussies are "apathetic" when it comes to tackling their super and they ignore or allow problems to go on for decades.
"This attitude could see a problem or error go on for 30 years before it's noticed," Intrust chief executive Brendan O'Farrell says.
"But you monitor your bank account, why not be proactive and read your super statement and your fund's annual report," he asks.
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SELF-MANAGED SUPER FUNDS
SELF-MANAGED funds have less avenues for complaint because they are run and managed by their members.
Each member must also be a trustee, and is responsible for all administration, compliance and investment decisions.
However, complaints about advisers hired by the trustees can be directed to:
- Institute of Chartered Accounts, CPA
- Australian Taxation Office
- Financial Ombudsman Service
- Australian Securities and Investments Commission
