Super industry not part of scandal-plagued financial services

The superannuation industry should be regarded as standing apart from what represents a scandal-plagued banking and finance sector, according to the public service union representing employees within the Superannuation Complaints Tribunal (SCT).

The Community and Public Sector Union (CPSU) has used its submission to the Senate Economics Reference Committee review of the legislation establishing the new Australian Financial Complaints Authority (AFCA) to claim “the list of scandals plaguing the banking and the finance sector is long” but that the superannuation industry is not a part of that scenario.

“The number of complaints received by the SCT is dwarfed by those handled by the Financial Ombudsman Services (FOS) and the Credit Industry Ombudsman (CIO),” the submission said.  “In the year 2015-2016, the complaints lodged with SCT amounted to just under half of those lodged with CIO and seven per cent of those with FOS.”

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The union also claimed that the Government had not done enough to address the real problems confronting the financial services industry stating that, “despite conducting two reviews into the sector, action has been minimal, piecemeal and disingenuous”.

“This bill does little to hold the banking or finance sector to account. Instead it reserves the most radical changes for the superannuation industry, which has had not seen anything close to the litany of scandals that have beset the finance sector,” the union submission said.

The submission pointed to the chronic under-funding of the SCT as being at the heart of any problems it may have confronted and suggested the move from a tribunal to a private company would undermine the fundamental premise of the consumer protections provided by the SCT – “access to decisions that are open to judicial review; and processes subject to the requirements of administrative law”.

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