Group death benefit complaints rose steeply between 2021 and last year, exposing gaps in superannuation trustees’ claims handling practices, an Australian Securities and Investments Commission (ASIC) review has found.

Complaints about all service issues doubled over the period, but disputes over delays in death benefit claims had a disproportionate increase from 2.5% of service-related cases to the Australian Financial Complaints Authority in 2021 to 8.5% last year.

“Complaints are a valuable source of information for trustees about the quality of the services being delivered,” the corporate regulator said. “ASIC is calling on trustees to urgently consider whether their arrangements for dealing with death benefit claims are fit for purpose.”

The regulator focused on death benefit claims in the first part of a two-phase review of super trustees’ practices and compliance with laws relating to member services.

As part of the first phase, the regulator examined death benefit-related communications and resources provided by 22 trustees on their websites. These 22 trustees accounted for about two-thirds of super fund assets as of June last year.

The review found the quality of information provided was poor in a few areas. Four of the 22 websites did not feature information about the death benefit claims process; six did not explain how to start a death benefit claim; and only eight contained information explaining how long it may take to finalise a death benefit claim.

“Effective communication is critical,” ASIC said. “Communicating clearly can reduce beneficiary anxiety, stress and confusion for beneficiaries associated with death benefit claims, while also reducing the workload on claims staff and complaints about the process.

“There is a lot of room for trustees to provide more practical guidance online about claiming a benefit after the death of a member, to make the process less daunting for a member’s beneficiaries.”

The regulator says trustees should regularly review complaints received about claims handling processes and procedures, to identify opportunities for improvement.