Internal dispute resolution (IDR) is a key part of consumer protection in superannuation. When a member has a problem, it is important that the trustee has a process to genuinely consider the complaint, work efficiently to resolve it, communicate transparently with the member, and reach a fair outcome.
From a trustee perspective, a strong and effective IDR process has significant benefits. For instance, reputation and brand building arising from enhancing member confidence and efficiency as a result of resolving members’ complaints without matters being escalated externally. Member complaints can provide valuable insights to trustees, potentially giving them a competitive advantage if trustees act on the insights. If systemic or wider issues are detected and addressed early, trustees can also avoid potential significant downstream remediation costs. To tap into these benefits, it is essential that trustees approach complaints with their members front-of-mind.
ASIC recently reviewed a selection of superannuation trustees and gained several insights into issues affecting good member outcomes in relation to complaints handling. We saw examples of how some trustees strategically used complaints to identify and act on wider issues impacting their members, thereby turning negatives into positives. We released our overall findings from this work on 9 December 2022. See 22-347MR Superannuation trustees on notice to uplift complaints handling.
Keep an eye on the clock
Timeliness of response is crucial to maintaining member trust and confidence in the fund. On the other hand, tardiness is likely to have a negative reputational impact.
RG 271 sets a maximum timeframe of 45 calendar days to issue a written IDR response for a superannuation trustee complaint (that is not an objection to the distribution of a death benefit). This maximum response timeframe is enforceable with only limited exceptions allowed for complaints with particular complexity or circumstances beyond a trustee’s control.
In a review of the handling of non-death benefit complaints for 38 funds ASIC found that:
- close to one in five funds sent out 10 per cent or more of their written responses after 45 days[1]
- almost half of the complainants who should have been issued a notification of a delay beyond 45 days, were not sent one. Trustees for 11 of 38 funds failed to send out IDR delay notifications more than 75 per cent of the time.
ASIC considers that trustees can enhance their ability to meet the timeliness requirements of RG 271 if they:
- Improve reporting – Ensure relevant senior management and the Board Committee responsible for oversight of the IDR process receive regular reports that adequately reflect IDR performance, with sufficient detail to highlight deficiencies with key requirements such as timeliness against regulatory requirements, and sending out IDR delay notifications.
- Detect and address obstacles causing delays – Proactively track complaints at different intervals and escalate those in danger of exceeding maximum response timeframes. If delays continue to occur, assess what factors are causing this and take appropriate action to address them. This could be dealing with resourcing constraints, or streamlining processes such as for approval of financial payments needed for complaint outcomes.
- Enhance record keeping and accountability for managing delays – Have a process that requires staff to substantiate and record that the complaint exceeded the maximum response timeframe due to a genuine limited exception (being significant complexity or circumstances the trustee could not control[2]) and that an IDR delay notification was sent to the complainant before the maximum timeframe elapsed.
When a member feels that their complaint is being heard and dealt with in a timely manner, it can increase their trust and satisfaction with their superannuation fund. This can lead to increased member retention and word-of-mouth recommendations.
Write responses with your readers in mind
A well-written response to a complaint helps allay member concerns and diffuse a negative situation, while demonstrating a trustee’s commitment to treat members fairly.
ASIC commissioned Susan Bell Research (SBR) to review 274 complaint responses sent by 10 trustees between 1 January and 30 April 2022, and assess whether these responses were easily understood by consumers. The findings from this review are outlined in Report 752: Review of written responses to superannuation complaints (REP 752).
In REP 752, SBR identified seven common reasons why responses were not very effective and suggested the following tips for trustees to improve IDR responses:
- Ensure response templates can cater for different circumstances – Responses should be tailored to match the complexity of the complaint.
- Make the letter or email easy to read – Use active voice, short sentences and single topic paragraphs.
- Write for a broad audience – Avoid technical language and large paragraphs.
- Make high value information stand out – State the outcome of the complaint early on in the response and make calls to action clear. Consider using sub-headings.
- Keep the body of the letter short – People are more likely to read all of a short letter than a long letter. More detailed information can be included as an attachment or appendix.
- Be accountable – Use active voice for errors, mistakes and delays that you cause – for example, ‘we made a mistake when we …’ rather than passive voice expressions such as ‘you were provided with incorrect information’.
- Resource appropriately – Allow time for proof-reading and peer review.
Trustees are encouraged to consider the findings in REP 752 and take steps to improve the quality of their responses to complaints.
Turn complaints into intelligence for continuous improvement
In addition to resolving a member’s concern, the IDR process is also an important avenue for the trustee to identify and address any potential systemic issues about their products and/or services.
Our detailed review of ten trustees last year found that not all trustees effectively tap into complaints as a source of intelligence:
- Only six of ten trustees we reviewed could explain the process they used to analyse complaint data to identify possible systemic issues.
- Five of the ten trustees could not describe how they used information from complaints to improve the experience of members generally.
But we did see examples of practices which helped embed a culture of learning from complaints, which all trustees should consider:
- Regular analysis of complaint data – Looking at all complaints, including those resolved at first point of contact, to identify both wider systemic issues, and services or processes that need improvement.
- Set accountability for addressing issues that are detected – We saw some trustees had adopted a dedicated method to review the findings from complaint data analysis and assign and track actions to address underlying issues. For example, through the trustee’s internal member experience or governance forum.
By analysing complaints data and identifying themes or patterns in complaints, trustees can get warnings about issues that may be
affecting their broader membership. The clear benefit of this is that issues can be managed or remedied before they further impact members and the trustee’s operations. This can contribute to increased member satisfaction and minimise unnecessary costs arising from fixing a bigger problem at a later date.
Conclusion
Effective complaints handling helps trustees identify issues early and demonstrates that they are truly focused on the interests of their members. It is best achieved by trustees viewing complaints as an important way to turn a perceived negative into a positive and build the trust and confidence of fund members.
The insights and examples covered in this article aim to help trustees approach complaints handling with consumers front of mind. ASIC has a strong focus on the interactions members have with their superannuation fund. Our findings from our review of complaints handling has confirmed that trustees need to do more to uplift their service standards. And trustees can take practical steps to achieve better outcomes for their members.
ASIC will continue to monitor how trustees comply with RG 271. Where we identify serious compliance failures, we will consider appropriate regulatory action.
ASIC’s Report 751 has helpful information for trustees seeking to examine their complaints handling arrangements to ensure they are member-centric and fit-for-purpose. The report sets out ASIC’s observations on compliance with timeframes for handling complaints, the content of written responses to complaints, management of systemic issues and standards for effective complaint management.
Highlighted in the report, as an area for trustees to focus on, is how to detect and address issues from complaints that impact their wider membership. Any gaps here could mean trustees miss the opportunity to improve their business and minimise future problems.
[1] For 14,719 written responses to complaints received and dealt with by 35 trustees for 38 super funds over the period 5 Oct 2021 until 28 Feb 2022. For further details see: ASIC Report 751 Disputes and deficiencies: A review of complaints handling by superannuation trustees, December 2022 (REP 751)
[2] Refer to RG 271.64-RG 271.68 for further details.
