SCT Quarterly - Q3 2017

Chairperson's welcome

Welcome to SCT Quarterly.

Q3 2017 has been a big quarter for the Superannuation Complaints Tribunal (SCT), and for superannuation and external dispute resolution generally.

At SCT, we have continued to improve our processes with the introduction of electronic document exchange for parties to complaints going to review. We have saved time, money and trees, and have received positive feedback from the trustees and complainants who have received encrypted USBs instead of boxes filled with documents. Response submissions will also be shared electronically from this point onwards.

On 16 October, our Annual Report for the 2016-17 financial year was tabled in Parliament. During the year, the number of complaints and complex enquiries received by the Tribunal increased by 17% on the 2015-16 year. Despite average staff numbers declining, the Tribunal kept the overall increase in open complaints to less than 100, bringing the total of open complaints to 1,621 as at 30 June 2017. You can read the Annual Report in full here.

In September, the Australian Government introduced legislation for the creation of the Australian Financial Complaints Authority (AFCA) to Parliament. The Senate Economics Legislation Committee held hearings on the legislation and tabled a report in October, which you can access here.

Treasury has created a transition team to lead the establishment of AFCA, headed by Dr Malcolm Edey. I have accepted an invitation to join an expert reference panel to assist the transition team. We will provide expert knowledge and experience as the transition team advises the Government on AFCA's terms of reference, governance and funding arrangements.

It's important to note that, until the legislation passes and AFCA becomes operational, SCT remains the external dispute resolution service for superannuation-related complaints, and continues to accept and resolve complaints.

In the previous two editions of SCT Quarterly, we focused on our biggest categories of complaints. This quarter, we are focusing on a smaller category, account balances, which falls under our largest heading, administration complaints. The proportion of administration complaints increased in the 2016-17 financial year, and they are typically quite complex and difficult to resolve.

Often, complaints related to account balance hinge on the clear communication of the trustee. We include some tips and suggestions on managing member communication both before and during the complaint.

We hope you enjoy this edition of SCT Quarterly. If you have any feedback, suggestions or queries, please send them through to us at

Helen Davis, Chairperson


Q3 2017 focus: account balance

At the SCT, we categorise our complaints, enabling us to analyse trends. Our open complaints are currently spread across 47 complaint categories, which fall under three broad headings: death complaints; disability complaints; and administration complaints.

In Q1, we focused on our biggest complaint category: the distribution of death benefits. In Q2, we looked at our second biggest complaint category: the deduction of insurance premiums.

The case studies we shared in those bulletins highlighted the importance of clear communication between trustees and members. So we discuss that in this edition, by focusing on another of our complaint categories: account balance. 4.9% of complaints received in Q3 2017 fell into this category.

Account balance considerations

Many of the account balance complaints that we receive at SCT relate to a trustee's attempted recovery of an overpayment or the correction of an overestimation. Complainants come to us confused, wondering how the super fund can ask for money back, or how they can be sure the new calculation is correct.

Incorrect estimates can generally be attributed to one of two things: data error; or administration platform error. In other words, either data is entered incorrectly (such as a contribution amount, recipient or category) or there is a problem with the software used to calculate the benefit.

(Of course, account balance errors can also be the correction of an underestimate or an underpayment. Funnily enough, we don't see complaints about such corrections as often!)

Clear communication principles

Trustees have an obligation to perform their duties and exercise their powers in the best interests of members, and to act fairly in dealing with members. In some cases, trustees may seek the repayment of an overpayment to a member, or to adjust an account balance estimate that is inaccurate, so that other members are not disadvantaged. The difference between a member accepting the change and making a complaint can be their understanding of what has happened, the degree of reliance on the information and the timing (the period over which the error has occurred and/or the time it has taken to correct the error). The trustee's communication, both before and during the complaint being made, shapes that understanding.

Members want to know why you're taking their money away. If it was never 'their money' to begin with, this needs to be presented tactfully and with empathy. The member may have been relying on the funds or may have made decisions based on the promise that is a balance estimate.

Some tips for clear communication between trustees and members:

  • Use plain English or, where quoting from a document that doesn't use plain English, provide a further explanation and/or an example
  • Clearly state your position with respect and empathy
  • Ensure that important details are given equal weight in member communications
  • If the member continues to ask the same question, reframe your answer to improve understanding.

Some tips for clear communication with us should a member bring their complaint to the SCT:

  • Let us know of any changes in your approach to an open complaint, for example:
    • Modifying a decision
    • Making a settlement offer (and/or having it accepted)
  • Provide the documents we request in a timely fashion
  • Let us know if any requests are unclear so we can review our communication with you
  • Keep contact details up to date with us, for example:
    • Key contact names
    • Email addresses.


SCT by the numbers Q3 2017

In Q3 2017, we resolved 435 complaints, 4.1% of which related to account balances.

Types of complaints resolved Q3 2017 - top ten

Type of complaint


Death benefit distribution


Deduction of insurance premiums


TPD benefit – delay in making decision


TPD benefit – declined on medical evidence


Account balance


Fees and charges


Delay in transfer of benefit


TTD benefit – amount in dispute


Failure to correct wrong information


ROBP – financial hardship claim


10.6% of the complaints were finalised at review stage (in other words, with a determination by the Tribunal).

The remaining 89.4% of the complaints were finalised and/or resolved by our staff at various stages of the investigation and conciliation process.

15.6% of finalised complaints were withdrawn by the complainant after resolution of their complaint at a conciliation conference. 15.2% were withdrawn by the SCT as lacking in substance, and 12.9% were withdrawn by the complainant prior to a conciliation conference being held.

32.2% of finalised complaints were found to be out of jurisdiction. Once again, the most common reason for finding a complaint out of jurisdiction was that the complaint had not first been made to the trustee, with this number rising to 84.3% of out-of-jurisdiction complaints finalised.

In Q3 2017, we received 533 complaints, 4.9% of which related to queries about the calculation of account balances and benefits.

Types of complaints received Q3 2017 – top ten

Type of complaint


Death benefit distribution


Deduction of insurance premiums


Account balance


TPD benefit – declined on medical evidence


Fees and charges


TTD benefit – amount in dispute


TPD benefit – delay in making a decision


Delay in transfer of benefit


Failure to provide information or respond to request


Insurance cover in dispute


In Q3 2017, SCT received a further 5537 enquiries by telephone and email.


Case study 1: Overpayment recovery

(reviewed by the Tribunal, determination D16-17\159 [2017] SCTA 48 (4 May 2017))

Background: The member retired from full-time employment in 2006, and in 2008, exited the fund and received her superannuation balance as a transfer to her bank account.

In 2012, the trustee of the fund discovered an error and the existence of overpayments. In 2014, the trustee advised the member that she had been overpaid, and sought repayment of the amount of overpayment. The overpayment was approximately 2% of the overall payment.

Complaint: The member brought a complaint to the SCT, questioning the right of the trustee to seek reimbursement of the payment almost six years after she had exited the fund, and questioning the new calculation. The member advised that the majority of the payment had been invested in a new self-managed superannuation fund, and that the rest had gone towards paying off a home renovation loan in full.

Further details: The trustee advised that it had the right and an obligation to seek repayment of the overpayment. The trustee acknowledged that a considerable amount of time had lapsed between the issue occurring and the trustee's review of the account information; however, the right remained and the onus was now on the member to demonstrate why the overpayment should not be recovered. The trustee also noted that the home renovation loan had been entered into prior to the overpayment and that the member could not therefore claim that she changed her position on its basis, and that she had in fact benefitted from the overpayment by paying the loan off in full earlier than would otherwise have been possible.

Decision: The Tribunal found that the member had not been able to demonstrate either change of position as a result of the overpayment or that repayment would cause considerable financial hardship.

The Tribunal also carefully examined the figures presented to it by the trustee, and was satisfied that the figures and underlying assumptions displayed the necessary rigour.

The Tribunal affirmed the decision of the trustee.


Case study 2: Change of position

(reviewed by the Tribunal, determination D16-17\178 [2017] SCTA 66 (13 June 2017))

Background: In January 2004, the member changed work category with the employer, and the trustee did not update this information. Had the trustee recorded the change of detail, the member's defined benefit guarantee would have been crystallised at that date.

The member accepted a redundancy package from her employer in 2012 and retired, exiting the division of the fund in which the error occurred and moving to another.

In 2014, the trustee reconstructed the member's former fund to reflect her change of work category, identifying that an overpayment had been made to member's account in the new division. The trustee notified the member of its intention to deduct the overpayment from her account, and proceeded with the deduction in 2016.

Complaint: The member brought a complaint to the SCT, requesting the return of the overpayment on the basis that she had changed her position (by choosing to retire) based on the incorrect benefit estimates supplied by the trustee between the years of 2004 and 2012.

She stated that the trustee had denied her the opportunity to make an informed decision, and that had she known her true account balance in 2012, she would have continued to work. She advised that re-entering the workforce was not an option years later.

Further details: The trustee advised that the member had never been entitled to the overpayment, and that they were obliged to recover the overpayment. The trustee further advised that it had sought recovery of similar overpayments from other members who were still with the fund, and one who had since exited the fund.

The trustee also questioned the statement of the member that she would not have accepted the redundancy package at the time, saying she had provided no proof of this nor of any detriment suffered.

Decision: The Tribunal found that the trustee had failed to take the necessary steps to determine whether the member's claim was valid as it was obliged to do. The Tribunal noted that it was not for the trustee to decide that the redundancy package offset the recovery of the overpayment.

The trustee had provided incorrect information and the member relied on that information to her detriment, deciding to leave a well-paying job and commence her retirement. The Tribunal found that the complainant had demonstrated change of position as a result of the overpayment.

The Tribunal set aside the decision of the trustee and substituted a decision that the trustee should adjust the member's account by crediting it with the overpayment plus interest.


Case study 3: Contribution allocation error

(resolved at conciliation, complaint treated as withdrawn by complainant)

Background: In February 2016, the member contacted the trustee to arrange a transfer to another fund. Before processing the transfer, the trustee discovered that contributions meant for another member had been misallocated to the member's account over a period of almost three years.

Due to an earlier rollover requested by the member, the remaining balance was less than the total misallocated amount. The trustee withdrew the full balance to reallocate the funds to the other member, and closed the member's account.

Complaint: The member brought a complaint to the SCT, seeking the repayment of the amount taken and the transfer of that amount to the nominated fund.

She stated that the trustee had not been forthcoming during this issue and that she had had to constantly call for updates. She advised that she had been assured that her account would not be touched until the trustee could provide evidence of the wrongdoing, but that the trustee then withdrew the balance and closed the account without her approval or knowledge.

Further details: The trustee advised that the employer had verified the error, and that they were required to recover the money and reallocate it to the correct account. They pointed out that the member was unfairly benefiting from the error while the member who should have received the contributions was missing out.

The trustee apologised for the error and for the miscommunication that had compounded the issue, and acknowledged that the member's customer service and internal dispute resolution experiences had been unsatisfactory.

Conciliation outcome: The trustee and the parties signed a settlement agreement and lodged it with the Tribunal. The Tribunal treated the complaint as withdrawn.


Feedback and contact us

We are constantly seeking to improve our services and the information we provide to consumers, trustees and industry, and we need your feedback to do it.

If you have any feedback on this edition of SCT Quarterly, or any queries or suggestions, please email with 'SCT Quarterly – Q3 2017' in the subject line.

Superannuation Complaints Tribunal
Melbourne VIC 3000

1300 884 114