Two-thirds of Aussies lack super death benefit nomination

Two-thirds of Australians have not been contacted by their super fund in the past year about setting a binding death benefit nomination, according to new research. The findings, released by Super Consumers Australia, suggest that at least 15.5 million people may not have a formal directive telling their super fund who should receive their money after they pass away.

Declining compliance rates are evident in the Your Say on Super survey. The data reveals a significant increase in the number of people without a nomination compared to 2024. The previous year, the same organization found that 36% of Australians, or at least 6.5 million people, lacked this specific form with their super fund. This year’s data indicates a sharp rise in the gap between what people should do and what funds are actually doing to help them complete the process.

“Funds are dropping the ball on customer service, and it is leading to real consumer harm,” said Xavier O’Halloran, the chief executive of Super Consumers Australia. Reducing avoidable delays and uncertainty for grieving families is a no brainer, he added.

The organization is now calling on the government to introduce mandatory customer service standards. These standards would require funds to communicate clearly with members and process death benefits within clear timeframes. Officials argue that too many Australians only learn about the importance of a binding death benefit nomination after someone they love has already died. An effective reminder from a super fund could help people make an informed decision, reduce delays, and make an incredibly difficult time a little easier for grieving families, O’Halloran explained.

SCA noted that some funds have had a lot of success with nomination campaigns. It is past time for the government to make this mandatory for all funds, the report concluded.

Customer service gaps are highlighted by a mystery shopping study of 20 major super fund call centres. The study examined how frontline service providers engaged with three customer enquiry scenarios: prospective customers, culturally and linguistically diverse (CALD) customers, and customers experiencing vulnerability. On average, the customer satisfaction score did not clear 49.9%. No super fund scored above 55% across the metrics of ease, success, and sentiment. None reached the 80% benchmark considered as the best practice “green zone.”

The Super Members Council had noted limitations on the research methodology, as the testers were not actually fund members. This meant a lot of the calls did not progress beyond the member verification process.