The Superannuation Complaints Tribunal (SCT) has warned superannuation fund trustees to be careful in handling member transfers during the current period of market volatility to ensure unnecessary losses do not occur.
The warning is contained in the Tribunal’s latest quarterly bulletin with the SCT chairperson, Jocelyn Furlan, saying trustees need to be aware "that market instability can and does cause problems for some fund members, whether or not they are approaching retirement".
Furlan cited the example of a fund member rolling a benefit from one fund to another and who, on the day he decides to roll out of his fund, checks his balance online and notes he has $20,000 in his account.
"By the time his request is processed – perhaps a week or two later – his account balance has dropped to $19,000 due to negative investment performance," the SCT chairperson said.
Furlan said the member could then be forgiven for believing he had lost $1,000 and therefore lodging a complaint with the SCT.
She said in reality the member may not have actually suffered a loss at the hands of his pre-existing fund.
"If the member’s new fund’s performance was not as good as that of the fund he is leaving, it may well be that, had his rollover request been processed sooner, he would have lost even more," Furlan said.
