Superannuation Under Scrutiny: How Lifecycle Governance Can Transform Claims Handling

500 days to process a death benefit claim  

ASIC has handed down 34 recommendations to superannuation trustees after identifying significant failings in death benefit claims handling processes across the industry. This follows closely on the heels of record greenwashing penalties exceeding $34 million imposed on financial services organizations in the past year.

For superannuation trustees, the message is clear: regulatory scrutiny is intensifying, and the costs of non-compliance are escalating dramatically.

The Devastating Impact of Poor Claims Handling

ASIC's report, titled "Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve," reveals systemic issues that cause real harm to vulnerable Australians at their most difficult moments:

Excessive delays: The fastest trustee resolved only 48% of death benefit claims within 90 days, while the slowest managed just 8% in the same timeframe

Poor oversight: None of the reviewed trustees effectively monitored or reported on end-to-end claims handling times

Process failures: 78% of reviewed claims had delays caused by processing issues within the trustee's control

Customer service breakdowns: 27% of claim files showed evidence of poor customer service, including unreturned calls and dismissive responses

Vulnerable member impacts: First Nations members and those experiencing vulnerability faced additional barriers

The Governance Gap in Superannuation

The ASIC report highlights a critical governance gap within many superannuation funds that extends beyond just death benefits processing. This same governance gap also contributes to other regulatory challenges, including the recent record Design and Distribution or Greenwashing penalties.

The common denominator in both cases is insufficient lifecycle management and governance processes that would ensure:

• Clear ownership of end-to-end processes
• Comprehensive monitoring and reporting
• Consistent implementation of regulatory requirements
• Effective cross-functional collaboration
• Real-time risk identification and mitigation

How Lifecycle Management & Governance Transforms Compliance

Implementing a robust lifecycle governance framework provides superannuation trustees with the foundation to address these challenges systematically. Here's how:

For Death Benefit Claims Handling and other Claims Handling Categories

• End-to-end visibility: Track the complete claims journey from notification to payment with detailed process mapping and expected timeframes versus actual timeframes
• Performance monitoring: Set and measure KPIs for processing times at each stage with automated health check reporting and trigger alerts for early risk warnings
• Regular process reviews: Conduct systematic reviews of claims processing journey timeframes, goals, and performance metrics to identify improvement opportunities and implement actions to address.
• Control effectiveness monitoring: Develop and regularly test process controls to ensure they're functioning as intended and review their effectiveness and risk rating.
• Automated alerts: Receive notifications when claims timeframes exceed time thresholds with clear escalation pathways
• Comprehensive audit trails: Maintain records of all reviews, improvement plans and process changes
• Vulnerability support: Build specialised processes for vulnerable members with dedicated monitoring

Real results from Financial Services Clients

Financial Services clients using Skyjed's lifecycle governance platform have achieved significant improvements:

• 50% reduction in administration time through streamlined workflows and automated reporting
• Over 50% improvement in performance and process monitoring and review of key obligations with standardised procedures and clear ownership
• Stronger regulatory compliance with comprehensive audit trails and evidence

Taking Action: Next Steps for Superannuation Trustees

In light of ASIC's report and the increasing regulatory focus on superannuation, trustees should take immediate action:

• Review current claims handling processes against ASIC's 34 recommendations
• Implement performance monitoring for end-to-end claims processing times
• Assess vulnerability support for First Nations members and other vulnerable groups
• Consider how digital governance tools can strengthen compliance and improve member outcomes

As ASIC Commissioner Constant emphasised: "Grieving Australians should not have to suffer further stress because of the failure of superannuation trustees to approach claims in a timely, clear, and respectful manner."

With regulatory scrutiny intensifying and penalties escalating, superannuation trustees need robust governance frameworks more than ever. By implementing effective lifecycle management across both claims handling and product governance, trustees can not only meet regulatory expectations but dramatically improve outcomes for their members.

Contact Skyjed today for a complimentary assessment of your fund's lifecycle governance framework.

Skyjed is a leading RegTech provider specialising in digital governance solutions for financial services organisations. Named a RegTech Finalist in 2023 and 2025, Skyjed helps clients reduce compliance risk while improving operational efficiency.

Skyjed Features

Skyjed offers a digital solution to help companies streamline a robust lifecycle governance framework by leveraging effective governance tools, reports, and monitoring workspace as a foundation to understand product lifecycles.

Here's how Skyjed can assist:

• Digitise the Lifecycle Governance Framework: Streamline the compliance process with digital governance tools and reporting.
• Access Pre-Built Checklists: Utilise checklists from FCA, ASIC, and other regulators to assess and review your claims
• Leverage Templates: Easily build the necessary evidence to back up sustainability claims with purpose-built templates
• Maintain Audit Trails: Keep comprehensive audit trails of monitoring reviews, data and decisions
• Automated Risks and Opportunities: Prioritise key risks and opportunities and receive notifications when you meet pre-defined thresholds
• Collaborate Across Teams: Enable cross-functional collaboration to ensure thorough compliance
• Multi Focus: Offers unlimited business critical lifecycle management and governance
• Audit Readiness: Supports external assurance with superior transparency through templates and audit trails, making the assurance process smoother for organisations facing mandatory audited reporting.
• Significant Efficiency Improvement: Teams using Skyjed double their compliance productivity, cutting administration time in half.

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