ASIC report shows urgent need for mandatory service standards as death benefits handling times improve only 3%

10 June 2026

ASIC’s follow-up review into superannuation death benefit claims handling shows only a 3% whole of industry improvement in the number of claims that took 6 months or less to process (ASIC REP 831).

While most super funds have self-reported some improvement in their data collection, governance, processes or communications, this has not translated into meaningful change for families who have lost a loved one. The small overall improvement in claims handling times despite significant regulatory effort from ASIC over the past few years demonstrates the critical need for mandatory service standards as funds are not sufficiently motivated to change on their own. 

Super Consumers Australia CEO Xavier O’Halloran said “the only super trustees that have shown significant improvement are the ones ASIC has already spent thousands of hours dealing with through the original review or enforcement action.” ASIC’s most recent report found that large funds (with member benefits more than $50 billion) showed a 19% improvement in the number of claims handled within 6 months - but almost all of their trustees were included in the original review or enforcement action ASIC has taken for significant claims handling failures. ASIC’s original report (ASIC REP 806), released just over a year ago, also revealed widespread failings by super funds in handling death benefit claims.

Super Consumers Australia said the follow-up report raises serious questions about super funds’ commitment to uplift customer services and outcomes on death benefit claims. Over a year after the release of ASIC’s original report, a 93-page roadmap for delivering good service, many super funds still have not implemented one of the most basic recommendations: setting targets for how long death benefit claims should take.

The organisation also pointed to concerns raised by the Australian Financial Complaints Authority in their recent systemic issues review, including weaknesses in governance of death benefit claims and inaccurate communications that left consumers unclear about processes, expected timeframes and their rights. Superannuation complaints to AFCA went up by 29% in 2025.

“People who have just lost a loved one are still dealing with confusing processes, poor communication and unacceptable delays. At the same time, complaints across the super sector continue to rise,” Mr O’Halloran said.

ASIC’s report also highlighted insufficient support for First Nations customers and people experiencing vulnerability. “The limited progress on support for First Nations peoples and people experiencing vulnerability means these groups continue to face greater barriers and worse outcomes,” Mr O’Halloran said.

Mark Holden, Acting Director of Mob Strong Debt Help said, “superannuation is a means for hundreds of thousands of First Nations peoples to provide security for their retirement or their loved ones. There are many administrative burdens in the superannuation sector that need culturally informed services tailored for First Nations customers and their beneficiaries. Yet many super funds are not looking into whether their customers need this kind of service and assume a one-size-fits-all approach” 

“One example is having to verify your ID, where some funds apply the AUSTRAC guidance to consider other types of ID, but other funds do not. This creates uncertainty as to whether you have the right ID. Family members cannot even ask a fund about a binding nomination without proving who they are first,” Mr. Holden said.

“We see a small handful of super funds making an effort to improve their services for First Nations customers, but we should not be seeing this as a gold standard. Every First Nations customer should expect their super fund to consider their needs and circumstances.” 

Super Consumers Australia and Mob Strong Debt Help are calling on the Government to urgently implement mandatory customer service standards for super funds, which include:

• enforceable timeframes for processing death benefit claims;

• an obligation to use AUSTRAC’s flexible approach to identifying its First Nations customers; and

• an obligation to provide cultural awareness and vulnerability training to staff.

“We are deeply concerned that the sector is not prepared for Australia’s ageing population at a time when death benefit claims are only expected to increase over the next decade. ASIC’s findings show a tinkering-around-the-edges approach by super funds. Leaving improvements up to the industry has clearly not delivered good outcomes for consumers,” Mr O’Halloran said.