Profit-to-member fund Cbus Super has announced it is overhauling its death benefits process to make it faster and more straight forward for its members’ next of kin.  

The fund will change its trust deed to introduce digital non-lapsing binding beneficiary nominations, and it will remove the option to make a non-binding beneficiary nomination along with the current three-year renewal process for binding nominations. 

Where members have not nominated a beneficiary, the order of benefit payments will be to surviving current spouse first, then to surviving children and then to the member’s estate. 

Cbus said this change will eliminate the need to undertake lengthy and complicated claim staking which is how eligible beneficiaries are determined which will save an estimated four to six weeks from the death claims process. 

The changes will be implemented in two stages over 18 months starting in December this year. 

Cbus Super CEO Kristian Fok said the fund is “determined” to improve claims processing.  

“That’s why we’ve doubled the size of our claims team and created specialist teams trained to handle death claims efficiently and compassionately,” Fok said in a media statement. 

Cbus was sued by ASIC due to repeated failures in handling insurance claims with the regulator alleging more than 10,000 Cbus members were impacted by death benefits and total and permanent disability (TPD) insurance claims taking over 90 days to be processed with an estimated $20 million loss to members. 

The regulator also alleged despite receiving reports from its third-party administrator, Australian Administration Services, United Super did not properly assess the scale of the impact to members and claimants. 

Furthermore, it alleged that when a matter was brought to the attention of the Cbus Risk Committee between November 2022 and February 2023, the trustee did not report these issues to ASIC within 30 days as required. 

Fok offered an open apology to affected members in July at the Investment Magazine Insurance in Super Summit.

“What we experienced, and some others in the industry, was absolutely horrific in terms of the experience that our members received at a time when they absolutely needed us,” Fok said. 

But the fund hasn’t been alone with death benefit failings with an ASIC report in March found systemic issues with claims handling from super funds, offering 34 recommendations for trustees to improve their services. 

The report came months after the government announced it would consult on a set of industry standards for member services.  

But the fund’s issue with death benefits has only been part of a broader governance concerns with fund being embroiled in scandal last year due to its connection with the trouble CFMEU union.  

Earlier this month Cbus announced it was eliminating its minimum application requirement for members to open an account-based pension, and along with it the minimum balance required to maintain an ABP.  

Cbus’ pension minimums were already among the lowest in the industry, and it was quickly followed by AustralianSuper and Hesta, which also dropped – but did not eliminate – their respective pension minimums.