Complaints, member outcomes and Protecting Your Super

7 min read
7 min read

As we process the outcome of the election and move out of caretaker government, the regulators have continued to progress reforms that will have a significant impact on the industry. This edition of rules and regs looks at major reform proposals for complaints handling, refinement of the member outcome assessment, and implementation of the Protecting Your Super Package.

Complaints handling reforms

In mid-May, ASIC released a consultation package proposing major reforms to its existing standards about how financial firms handle consumer complaints. The proposed standards are intended to improve the way that consumer complaints are dealt with across the financial system and make firms’ complaints handling performance transparent. The reforms follow on from the Ramsay Review of the financial services dispute resolution framework and the commencement of the Australian Financial Complaints Authority as the external dispute resolution body for financial services, including APRA-regulated superannuation funds.

The proposals will have a significant impact on internal dispute resolution (IDR) practices for all financial firms, including trustees of APRA-regulated superannuation funds.

The consultation package includes Consultation Paper CP 311 Internal dispute resolution: update to RG 165, as well as a draft updated version of Regulatory Guide RG 165, now re-titled Internal dispute resolution. Some key elements of the new standards that ASIC is seeking feedback on as part of the current consultation include:

  • maximum time frames for responding to a complaint – including a reduction in the IDR timeframe for superannuation complaints from the current 90 days to 45 days
  • what constitutes a ‘complaint’ – with important extensions to the concept utilised in the current version of RG 165 to cover complaints “to or about” a financial firm and a specific expectation that IDR processes should capture complaints made by identifiable consumers on a firm’s social media platforms
  • standards about what should be in written reasons for decisions
  • a strengthened requirement that firms take a systemic focus to complaints handling
  • the details of the new framework for reporting of complaints data to ASIC.

Submissions are due to ASIC by 9 August. There will be a separate consultation, in early 2020, on the publication of the IDR data reported to ASIC.

Member outcomes: revised prudential standard

APRA has launched a consultation on proposed updates to its prudential standard on strategic planning and member outcomes, which will come into effect on 1 January 2020.

APRA released Prudential Standard SPS 515 Strategic Planning and Member Outcomes in December as part of a package of measures designed to strengthen strategic and business planning and assessment of performance by registrable superannuation entity (RSE) licensees. The standard had a particular focus on enhancing member outcomes.

The standard released in December introduced a number of requirements, including an outcomes assessment requiring licensees to annually evaluate their performance in delivering sound, value-for-money outcomes to all members, covering both MySuper and choice products.

APRA commenced its development of SPS 515 independent of proposed legislative measures to require RSE licensees to conduct outcomes assessments but had indicated it would review its prudential requirements in the event the legislated outcomes assessment was ultimately passed by Parliament. The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Act 2019, which was passed by Parliament in April, requires RSE licensees to undertake annual outcomes assessments for each MySuper and choice product they offer.

APRA has now revised SPS 515 to clarify how the legislated outcomes assessment in the Bill interacts with APRA’s prudential requirements.

Under the revised standard, RSE licensees will be required to undertake an annual Business Performance review, which maintains the overall substance of the requirements outlined last December. In undertaking their Business Performance Review, RSE licensees must take account of the legislated outcomes assessment and meet other requirements designed to ensure APRA’s original policy objectives are met. These include:

  • reviewing the performance of their business operations through robust business plan monitoring
  • analysing the outcomes delivered to different membership cohorts
  • considering whether they will continue to deliver quality member outcomes into the future
  • acting to address any identified areas of required improvement.

Protecting your super

As the industry works to implement the Protecting Your Super (PYS) reforms, each of the regulators has released material providing guidance and outlining their expectations of fund trustees.

Under the PYS reforms, which come into effect on 1 July:

  • insurance will be opt-in for members whose accounts have been inactive for 16 months
  • fund members with balances under $6,000 whose accounts have been inactive for 16 months will have their balances paid to the ATO, which will take proactive steps to consolidate them with the members’ active super fund
  • caps will be imposed on certain fees for account balances under $6,000
  • exit fees will not be charged for moving money from a superannuation account.

ASIC has called on trustees to ensure that any information provided to members in implementing the reforms is balanced and factual, not misleading. ASIC expects trustees to implement the changes in a timely manner and to communicate responsibly, in a way that helps their members. In particular, ASIC has noted that:

  • it is not appropriate for trustees to encourage all members to maintain insurance, as many members with inactive accounts will be better off allowing the insurance to lapse
  • trustees should not be urging all members with low-balance accounts to keep their account within the fund as this may not be in the best interests of members.

ASIC has indicated it may take action in relation to trustees’ communications regarding the PYS reforms where trustees break the law through misleading communications.

ASIC has updated its MoneySmart website to include some consumer-focused information regarding the reforms. ASIC has encouraged trustees to refer to this content where appropriate, but also reminded them that a reference to MoneySmart in itself is not sufficient to ensure the communications are balanced.

APRA has written to all registrable superannuation entity (RSE) licensees to highlight a number of issues in relation to implementation of PYS. The letter states that APRA:

  • considers the reforms to be an important step in improving member outcomes across the entire superannuation industry, particularly for those members with low account balances
  • expects that RSE licensees will implement the reforms in ways that promote the outcomes the reforms are seeking to achieve and reflect the obligation to act in members’ best interests.

The letter also indicates that APRA expects all RSE licensees:

  • to review their policies governing the transfer of accounts to eligible rollover funds and determine whether they remain in the best interest of members
  • to ensure that any account transfers, including successor fund transfers, do not avert or delay account consolidation under the PYS reforms, contrary to the best interest of members.

APRA has also published some Frequently Asked Questions to provide general guidance on the PYS reforms and encouraged RSE licensees to raise any issues with their APRA Supervisor.

The ATO also wrote recently to trustees to provide an update on the PYS measure requiring inactive low balance accounts to be transferred to the ATO for consolidation. As well as making avail
able its responses to questions raised on the measure, the ATO has published a draft member authorisation form that may be used where a member authorises a trustee to declare to the ATO, on their behalf, that their balance is not to be treated as an inactive low-balance account. The ATO has also settled an interim reporting solution for the low balance inactive accounts measure that will apply until changes can be introduced in a new version of the SuperStream rollover message.

‘Rules and regs’ provides a snapshot of key regulatory developments.
Picture of By Julia Stannard

By Julia Stannard

senior policy advisor

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Carmen Beverley-Smith

Executive Director - Superannuation, Life & Private Health Insurance, APRA

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Carmen joined APRA in March 2023 and holds the role of Executive Director, Life and Private Health Insurance and Superannuation.  

She has had an esteemed career in financial services, spanning over 25 years. She has held diverse leadership roles at Westpac and Commonwealth Bank of Australia, including across risk, transformation and change, product and portfolio development, and sales and service. 

Prior to joining APRA, she held the role of General Manager, Risk Transformation Delivery Integration at Westpac. This involved leading the group-wide implementation of a suite of solutions to uplift risk management capability and develop data, analytics and reporting. 

Carmen leads with a values-driven approach and a particular interest in developing and mentoring talent. 

She holds a Bachelor of Commerce and Accounting, is a certified Chartered Accountant and a Graduate of the Australian Institute of Company Directors. 

Amy C. Edmondson

Novartis Professor of Leadership and Management, Harvard Business School

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Amy C. Edmondson is the Novartis Professor of Leadership and Management at the Harvard Business School, a chair established to support the study of human interactions that lead to the creation of successful enterprises that contribute to the betterment of society.

Edmondson has been recognized by the biannual Thinkers50 global ranking of management thinkers since 2011, and most recently was ranked #1 in 2021 and 2023; she also received that organization’s Breakthrough Idea Award in 2019, and Talent Award in 2017.  She studies teaming, psychological safety, and organisational learning, and her articles have been published in numerous academic and management outlets, including Administrative Science Quarterly, Academy of Management Journal, Harvard Business Review and California Management Review. Her 2019 book, The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation and Growth (Wiley), has been translated into 15 languages. Her prior books – Teaming: How organizations learn, innovate and compete in the knowledge economy (Jossey-Bass, 2012), Teaming to Innovate (Jossey-Bass, 2013) and Extreme Teaming (Emerald, 2017) – explore teamwork in dynamic organisational environments. In Building the future: Big teaming for audacious innovation (Berrett-Koehler, 2016), she examines the challenges and opportunities of teaming across industries to build smart cities. 

Edmondson’s latest book, Right Kind of Wrong (Atria), builds on her prior work on psychological safety and teaming to provide a framework for thinking about, discussing, and practicing the science of failing well. First published in the US and the UK in September, 2023, the book is due to be translated into 24 additional languages, and was selected for the Financial Times and Schroders Best Business Book of the Year award.

Before her academic career, she was Director of Research at Pecos River Learning Centers, where she worked on transformational change in large companies. In the early 1980s, she worked as Chief Engineer for architect/inventor Buckminster Fuller, and her book A Fuller Explanation: The Synergetic Geometry of R. Buckminster Fuller (Birkauser Boston, 1987) clarifies Fuller’s mathematical contributions for a non-technical audience. Edmondson received her PhD in organisational behavior, AM in psychology, and AB in engineering and design from Harvard University.

 

Daniel Mulino MP

Assistant Treasurer and Minister for Financial Services

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Born in Brindisi, Italy, Daniel was a young child when he moved with his family to Australia. He grew up in Canberra and completed his first degrees – arts and law – at the ANU. He then completed a Master of Economics (University of Sydney) and a PhD in economics from Yale.

He lectured at Monash University, was an economic adviser in the Gillard government and was a Victorian MP from 2014 to 2018. As Parliamentary Secretary to the Treasurer of Victoria, Daniel helped deliver major infrastructure projects and developed innovative financing structures for community projects.

In 2018 he was preselected for the new federal seat of Fraser and became its first MP at the 2019 election, re-elected in 2022 and 2025. From 2022 to 2025, Daniel was chair of the House of Representatives’ Standing Economics Committee in which he chaired inquiries; economic dynamism, competition and business formation and insurers’ responses to 2022 major floods claims.

In 2025, he became the Assistant Treasurer and Minister for Financial Services.

In August 2022, Daniel published ‘Safety Net: The Future of Welfare in Australia’, which aims to explore the ways in which an insurance approach can improve the effectiveness of government service delivery.