ASFA takes stance against proposed superannuation ombudsman

In a statement yesterday, ASFA said the government should increase funding for the SCT, rather than scrap it for a Superannuation Ombudsman.

This proposal was introduced by the same government-appointed panel that recommends merging the Financial Ombudsman Service (FOS) and the Credit and Investment Ombudsman (CIO).

ASFA chief executive Martin Fahy said that the SCT has a number of important strengths and protections for consumers and trustees, which would be reduced in a move to a membership-based ombudsman scheme.

“With the SCT, there is no monetary limit on access or redress and there is enforceability of determinations and rights of appeal,” he said.

“That protects the consumer. A membership-based industry ombudsman would provide scope for limits to be imposed on the type or value of claims that may be pursued, there would be no direct right of appeal and the possibility the individual would need to pursue contractual remedies against a provider to enforce a decision.”

Mr Fahy recommends instead that the SCT be improved.

“There is significant scope to modernise the operation of the SCT through important changes to its governance, accountability and service model, and this should be the priority for government,” he said.

“The current model has many aspects that are appropriate given the unique nature of compulsory superannuation as a financial product and the fiduciary duties owed by trustees to the fund and members/beneficiaries.”