Superannuation Funds Tribunal report reveals nasty retirement shocks

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Even if you think you have the details of your fund covered, the latest annual report from the Superannuation Funds Tribunal shows that, if you’re not completely savvy with your super fund, you can still receive a nasty shock in retirement.

The tribunal’s report reveals the many instances of what can go wrong with super, and the importance of double checking your fund’s fine print.

One case study shows how in 2003 one member wrote to his fund to cancel his death and disability cover. He received a letter from his fund which he believed confirmed the cancellation of his request. Ten years later, he noticed that payments were still being withdrawn from his account. When he complained to the Tribunal, it found that wording in the original letter was unclear, but the Tribunal only refunded the member’s insurance premiums for a period between 2003 and 2004.

This is because he received another letter in 2004 telling him his insurance details had changed and that he had to ‘opt out’ if he didn’t want cover. Thinking that this letter did not apply to him because he’d already cancelled his insurance, he ignored it. Hence, the super company automatically reinstated his insurance and he was charged accordingly.

This is not the only type of retirement shock faced by fund members. Another woman who retired in 2006 and in 2008, left her fund and used her super balance to start her own self-managed super fund (SMSF) and also to pay off a loan.

Six years later, her super fund noticed that she had been overpaid two years’ worth of returns and demanded repayment. The member contacted the tribunal to see if she was liable for these repayments six years after the fund was closed. Turns out, she was, as the Tribunal ruled in the fund’s favour.

Other tales of overpayments that are discovered years later are not uncommon.

The report highlights the importance of double checking the fine print on your super fund, closely reading any correspondence sent to you and monitoring statements for any fees charged, withdrawals made and other possible miscalculations.

If these errors are spotted early on, you can avoid a nasty shock in retirement – when you can least afford it.

Do you read the fine print on your super statements? How well do you know your superannuation?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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8 Comments

Total Comments: 8
  1. 0
    0

    A bad decision by the Tribunal which, like many other institutions, acts for the business rather than the victim.
    Just try winning a case against businesses like Optus or Telstra with the TIO (Telecommunications Ombudsman). Apart from a routine billing issue these two can do whatever they want to consumers and the TIO (a business owned entity not a government agency!) will do nothing. Same deal with many fake regulators who are little more than rubber stamps for big business which is fraudulent behaviour the media rarely delves into.

    • 0
      0

      Mick, I had an issue with the local AusPostal agency a few years ago. They decided unilaterally to return all mail to my post box and it took me a couple of weeks to realise we hadn’t had any mail. So I went and saw them to correct it they said yes they would fix it, but the didn’t!! I even sent mail to myself addressed to the AusPost agency and it returned to sender. By this time, I was getting sick of their lazy and nasty attitude and I reported them to the Ombudsman. Lucky I had all the details and was able to prove my assertion. The help line at Auspost was useless as the proverbial and did nothing about it. So I went to a different post office and got a box there and put in a form to redirect any mail to the new PO Box. And that never happened either. The local PO was now deliberately doing nothing because I complained about them. The ombudsman ruled in my favour eventually and I got my money back plus compensation, not much really but it was the principle of it. So this does back up what you are saying, it is incredibly hard to get these companies to fix what are their problems!

    • 0
      0

      Heard on the radio this morning that Telstra has to refund those who were promised a certain speed on their NBN and didn’t receive it because Telstra didn’t buy enough bandwidth. Could be that the worm has turned MICK.

  2. 0
    0

    Well he could have died and then he would have appreciated his insurance cover. hehe
    I get annual reports – its probably best to read them and get depressed like I do!

  3. 0
    0

    The woman with the overpayment and a request to repay the over payment by Super being upheld by tribunal.
    Would that work the other way around!!!!!!
    {;-(0)

  4. 0
    0

    These bodies that are supposed to be oversighting the industry are nothing better than a total waste of time.

  5. 0
    0

    The problem with tribunals or courts of law is that the letter of the law is applied rather than the spirit of the law. We see it day after day and it usually revolves around big business getting a top of the range barrister, who most us cannot afford, with an army of researchers and a price to match finding some very obscure ruling. Judges (ex-barristers in most cases) seem to rule in favour of the side which has made the most effort.

  6. 0
    0

    I, however, have nothing praise for the TIO, who managed to solve my internet/phone problem with Telstra, and I got a full refund. Mind you, I had to be tenacious, record everything, and keep on at them for 5 months, but success in the end.


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