Complaints about superannuation are trending downwards, according to data from the Australian Financial Complaints Authority (AFCA), which finished the year with roughly 6000 complaints in its superannuation jurisdiction – a decrease of more than 1000 complaints from the previous year.

One of the most significant declines was in complaints about insurance claims handling, which fell from 1730 to 1000.

“[Funds] have changed the way that they do things, they’ve increased resources, they’ve moved activity centres and things are definitely improved,” Heather Gray, AFCA lead ombudsman for superannuation, told the Investment Magazine Insurance in Super Summit on Tuesday.

But to the mind of Super Consumers Australia chief executive Xavier O’Halloran, complaints are still too high – and may only have fallen because of legal action.

“Two of the biggest funds in the country are currently facing legal action by the regulator.

“It’s unsurprising that they are taking their obligations extremely seriously right now and I suspect they’re probably some of the major drivers of the decrease as a result.

“My concern is that once the glare of the regulator’s attention drifts away, will these trends continue?”

But Pippa Lane, senior executive leader for superannuation and life insurance at ASIC, said that member services are a strategic priority for the regulator beyond its existing consumer protection priorities, demonstrating “how seriously ASIC takes it”.

“We are continuing to devote significant resources across the organisation to these issues,” Lane said.

“In our regulation supervision group, we will be following up on our death benefits work to understand what progress trustees have made since the report…We’ll be checking in again with trustees to understand exactly where industry is, and that will be across industry this time, not just the 10 trustees that were part of the report earlier this year.”

ASIC will also be looking at the degree to which trustees are collecting complaints information, as well as how effectively they’re analysing it and identifying systemic issues within it and whether those issues are being reported to the board.

“[That will be] particularly around those transformational times that are higher risk, so around mergers for example, or administration transitions, when we know there’s a heightened risk of member services going wrong, we’ll be taking an extra look,” Lane said.

“And superannuation member services remains an enforcement priority for ASIC as well. Where we find suspected misconduct, we’ll be referring that through to our enforcement team to be investigated.”

Meanwhile, APRA general manager for superannuation Peter Kohlhagen noted that CPS230 is in effect as of 1 July and has the intention of “lifting the bar” around how insurers and superannuation funds manage operational risks and how they oversee their service providers.

“The administrators and insurers are obviously really critical service providers for superannuation funds that are really important touchpoints for their members,” Kohlhagen said.

“And the real message here is that, regardless of whether you insource that or outsource that, as a fund you maintain the responsibility for making sure that’s delivered appropriately.”

Backing that up is the fact that the Financial Accountability Regime – which Kohlhagen thinks of as a “package deal” with CPS230 – is now in force.

“When we talk to insurers and trustees, what we hear from them is that one, it’s a lot of work, but two, those that are more forward thinking on that and are looking at it as an opportunity to understand the end-to-end processes – who has the accountability? – are getting a lot of value out of the exercise.”

But the claims handling process – and how funds conduct themselves – can still be “all too complex” for the people who wind up contacting AFCA, according to Gray.

“Sometimes they’re people with very little financial experience or literacy,” Gray said.

“Sometimes they’re people with enormous financial experience or literacy, people who work in senior roles and with high qualifications and they don’t understand it either. It’s too complicated. People will come and say that they haven’t understood the explanation they’ve had from the trustee and insurer. It makes no sense to them.”

Issues also arise from communication – or the lack of it.

“They don’t understand what they’re told by the call centre, and they’re not always told they correct thing, they get correspondence which is a bit generic…sometimes that leads to people really disengaging from the process and effectively causing their own delay. But they’re causing their own delay because they really don’t understand what they’re being asked for.”

Meanwhile, O’Halloran thinks the “missing piece” of the complaints handling experience is a “customer service standard”.

“[That would create] ongoing accountability for superannuation funds and insurers. Obviously, we’ve got the Life Insurance Code of Practice, which is great and doesn’t seem to be the major driver of the problems based on all ASIC’s work. It is really with the superannuation fund that that uplift has to happen.”