Recent market volatility means there is now increased urgency on superannuation fund trustees to process member rollover requests in a timelier manner, according to the Superannuation Complaints Tribunal (SCT).
This emphasis has arisen from complaints from members whose benefit balance has decreased in value from the time their rollover request was submitted to the time the request was processed.
The rollover in these circumstances crystallises losses arising from market volatility, but this fact alone does not necessarily give members grounds for complaint.
“Members who find themselves in this situation need to demonstrate not only that the processing of their rollover request was unreasonably delayed, but also that they would not have lost as much in the new fund had their rollover been processed without delay,” SCT chair Jocelyn Furlan said.
Furlan said in these circumstances if the performance of the fund receiving the rollover did not match the member’s previous super fund, there may be no grounds for complaint as the loss of benefits suffered might actually have ended up being smaller.
She said super fund trustees had an obligation to deal with these complaints regardless of the prevailing circumstances.
“The trustee must still deal with the complaint, as must the tribunal if the complaint is not resolved to the complainant’s satisfaction within 90 days of the complaint being lodged with the trustee,” she said.
The market volatility has also sparked complaints from defined benefit superannuation fund members where a multiple of the final average salary and years of service is used to define the benefit.
These individuals are often under the impression they are immune to market movements, however, since the calculation cannot be performed until after the final contributions are received, and there can be a mismatch between this date and the members last day of employment, losses in benefits can arise.
“Trustees of funds with defined benefit members should ensure that their disclosure material clearly informs members about what happens to their crystallised benefit between the date they retire and the date they are paid,” Furlan said.
