The corporate superannuation industry is not serving the interests of members by dragging its heels when transferring balances, Navigator today asserted.
The corporate superannuation industry is not serving the interests of members by dragging its heels when transferring balances, Navigator today asserted.
Allan Griffiths, chief executive officer, said some companies are particularly slow and unaccommodating.
For example, some industry funds request over the top proof of identity requirements, including asking clients to provide a 100 point identity check before they release funds.
"This could be described as a deliberate delaying tactic. One which really works against client interests, especially those living outside a major city. There is no need to go to such lengths and is clearly not required by legislation. It could be perceived as just about ‘making it too hard’ for people to get their money," says Allan.
"From a member’s perspective, moving funds between administrators is one of the key issues of frustration with the superannuation industry. I understand companies don’t like money flowing out, but it’s the member’s money and if they want to move it then we have a duty to respond to their instructions. Some companies take up to six months to transfer funds from receipt of the member’s request," Allan said.
"Administration delays and mistakes from time to time are frustrating enough but can be understood, however pro-active delaying tactics damage the reputation of the industry, and act against the will and the interests of members," he said. "Where the member is attempting to consolidate their superannuation accounts but is delayed by a slow fund, the member is potentially exposed to fees from both superannuation providers."
"These unnecessary fees could otherwise be invested to help create further wealth at retirement. Such members also receive multiple sets of reports and paperwork that soon become difficult to keep track of," he said.
Allan said Navigator was not one of the slow companies. "Fortunately, we are dealing with strong increases in the level of corporate super funds under our administration rather than members wanting to take their money away. However, on the few times we do transfer funds to a competitor we do it within seven working days of receiving the request." (It may take up to 30 days if employer fund is involved).
"We’re now administering more than $500 million of corporate super funds – an increase of 25 per cent over the 12 months to end June 2003 – as a result of delivering enhanced services and providing flexibility for investors," Allan said.
"When members do wish to transfer we respect that decision and on average, over the last six months we have taken just five business days – rather than up to six months – to transfer member’s funds."
"In the interests of members, I recommend all other participants in the superannuation industry look to constantly improve services provided to members; in this case by improving the time they take to transfer member benefits," he said.
Geoff Crewe, managing director of Certainty Financials, agrees with these sentiments and says the tardiness of some of the bigger names in the industry was a disgrace.
"There is no excuse for slow administration when transferring funds between administrators - it is a simple process. What we are seeing is a last gasp grab for fees, and this is unflattering to an otherwise excellent industry," said Geoff.
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Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Aviva Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
- Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$68.32 billion, and more than A$488 billion of assets under management (as at 1 July 2003). The group has more than 59,000 employees and 25 million customers worldwide.
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