Superannuation slip-up

When James started work in 1993 he joined his employer’s superannuation fund. James changed jobs in 2011 and had two options, he could:

  • withdraw from the fund and receive $104,862 or
  • keep his money invested in the fund and, when he retired, receive a lump sum of $59,571.90 and an annuity of $9,053.48 every year until he died.

James decided to keep his money invested in the fund.

Superannuation fund decides to wind up

In November 2016 the superannuation fund decided to wind up, and wrote to James advising he could expect a lump sum payment of $109,000. James thought this seemed low, and contacted the trustees. Between November 2016 and April 2017 James emailed and telephoned the trustees regularly, asking what was happening with his enquiry about the accuracy of the wind-up benefit. James was growing increasingly frustrated, and felt the trustees were deliberating ignoring him.

Calculation mistake identified

In April 2017 the trustees advised they had made a mistake when calculating James’ benefit, and that it was now $135,700. James was still not convinced the trustees had correctly calculated the benefit, and asked for more information.


When the trustees were not forthcoming James complained to FSCL, asking for more information about the calculation and an acknowledgement that the delay in communication had caused James stress and inconvenience. James was so frustrated with the trustees’ lack of communication that he made a Privacy Act request.

James’ view

James asked us to investigate the trustee’s failure to respond to him and to check that the wind-up benefit offered was correct. James said the trustees should have responded to his requests for information promptly, and it should not have been necessary for him to request information under the Privacy Act.


Meeting with the trustees

After we began our investigation the trustees offered to meet with James to explain the calculation of the windup benefit. The trust’s actuary attended the meeting and explained how she calculated James’ benefit and how the calculation error occurred. The meeting also gave the trustees the opportunity to apologise in person to James, explaining they had been under extreme pressure to wind up the fund causing delays in communication with him.

Explanation and apology accepted, but complaint unresolved

James accepted the actuary had correctly calculated the windup benefit. Although James’ also accepted the apology, this did not entirely resolve his complaint. At the conclusion of the meeting James said he would like to think about how the complaint could be resolved.

Following the meeting James explained to us that he felt the trustees were getting off too lightly, and did not fully appreciate the consequences of their behaviour towards him. James said it should not have taken from November 2016 to April 2017 for the trustees to give him the information he needed. During that time, he was often given deadlines for a response that were ignored. James said that, if he had not persevered, the trustees would never have identified the mistake and he would have been $30,000 worse off. Finally, James said he should not have had to make a Privacy Act request to get information he was entitled to.


We discussed James’ response with the trustees, and the trustees agreed to offer James $750 as an acknowledgement of the stress and inconvenience he experienced. James accepted the $750 and the complaint was resolved on this basis.

Key insight for participants

Communication failures are often at the heart of complaints we see. Even if a participant is under pressure, and cannot give the information required quickly, an acknowledgement of delay and regular updates, even if no firm progress has been made, can significantly reduce a client’s stress.