As superannuation fund statement season draws closer, breaking the bad news about declining returns is not the only thing super funds have to worry about. Some fund trustees are also raising concerns about the risks associated with communications between funds and their members.
"There are around 10 million members of super funds in Australia. This means that during a period of late July to mid October there will be 10 million statements sent out into letterboxes," Non-Government Schools Superannuation chief executive Anthony Rodwell-Ball said.
"The risk of theft of sensitive information is increased by the volume of traffic."
Rodwell-Ball said super funds could potentially be considered a soft target in comparison to other financial institutions.
"Super funds are unable to make the same degree of investment in resources and people to manage risks. The problem is compounded by the high volume of exposure," he said.
An AustralianSuper spokesperson said he was aware of recent fraud activity, particularly to do with self-managed superannuation funds (SMSF), including illegal early release schemes.
And it seems these concerns are not without foundation.
In late May, Melbourne couple Shane and Nicole White pleaded guilty to ASIC charges relating to SMSF fraud.
ASIC alleged Shaun White misled investors and acted dishonestly by encouraging them to roll their super savings into SMSFs established by a company, which he had access to through a hidden power-of-attorney clause.
White was able to transfer more than $450,000 from the investors' accounts and a number of retirees lost almost all of their superannuation.
The AustralianSuper spokesperson recommends that trustees look out for frequent rollover requests to the same SMSFs or to different SMSFs with the same addresses.
"Where suspicions arise about these requests, we are entitled to seek further verification from our member. In some cases, members have withdrawn their rollover requests once we've asked for additional information about the receiving fund," he said.
Following from this, Rodwell-Ball said funds should put in different layers of control, depending on the size of payments being rolled over.
"There should be more vigorous crosschecking of details, such as change of address," he said.
In relation to statement season and protecting the private information of members, funds should be restrained in terms of their mail-outs.
Rodwell-Ball said funds should make an effort not to advertise on their statement envelopes as a means of not attracting attention.
"Funds are in different places with this and different funds will have varying risk tolerances. It is up to the funds to come up with a risk tolerance that is right for them," he said.
