Compensation for an investment switch that did not occur at the correct time

Prior to 1 October 2024, when AustralianSuper was notified of a member’s death, the member’s account generally remained invested in their existing investment option(s) — or the Balanced option if no investment choice had been made — until the death benefit was paid to one or more beneficiaries. During this period, the account continued to receive investment returns (which could be positive or negative), and the value of the death benefit could fluctuate accordingly.

From 1 October 2024, AustralianSuper changed the way a late member’s account is invested after notification of death. Under this change, the late member’s account is invested in the Cash investment option after AustralianSuper is notified of their death, including any contributions received after death (where applicable). The investment switch is made within defined timeframes, depending on how the account was invested prior to death. The investment switch should have been made within the following timeframes:

• For Pre-Mixed and DIY Mix investment options, within two business days of AustralianSuper being notified of their death.
• For the Member Direct investment option, generally within 14 business days of AustralianSuper being notified of their death to allow sufficient time to sell down their Member Direct investments. The switch could be further delayed if there are dividends due but not yet paid, pending corporate actions, or restricted or suspended securities on the account.

The Cash investment option is designed to have stable returns and a very low short‑term risk level. Once the switch to Cash takes effect, the account receives the investment returns of the Cash investment option until the death benefit is paid.

This remediation relates to an issue identified where, for some deceased members, the investment switch to Cash following notification of death was not processed correctly or was delayed. As a result, affected accounts did not move to the Cash investment option at the intended time.

A beneficiary will be eligible for a remediation payment if the deceased member is an impacted member under the Investment Switch Error Remediation.

An impacted member is a deceased member whose account, after the Fund was notified of their death, experienced one of the following during the remediation scope period:

• the account was not switched to Cash when it should have been
• the account was switched to Cash later than it should have been, or
• the account was switched to Cash earlier than it should have been.

Eligibility for compensation depends on whether the error resulted in a negative financial impact.

The remediation aims to restore the impacted member’s account to the position it would have been in had the investment switch to Cash occurred correctly on the death notification date.

For impacted members where the Death Benefit claim has already been paid out, the Total Remediation Payment may include:

• financial loss amount (refund of any loss suffered including any administration fees that may have been charged)
• loss of investment earnings on the financial loss amount up to the date we calculated the compensation payment, and
• additional returns applied for a short period to cover processing time.

The remediation payment will be invested in the Fund’s Cash investment option and will continue to receive returns until it is paid into your bank account.

Yes. Any remediation payment forms part of the deceased member’s death benefit and is distributed to the same beneficiaries, in the same proportions, as the original death benefit.

In most cases, beneficiaries do not need to take any action. AustralianSuper will assess eligibility, calculate any remediation amount, and issue a remediation outcome letter explaining the result.

Depending on how the original death benefit was distributed, generally beneficiaries can expect to receive the Remediation payment approximately 60 days after receipt of the Remediation Outcome Letter. However, there are some scenarios where the payment cannot be processed until we have received confirmation of valid bank account details. The Remediation Outcome Letter outlines any actions if necessary.

Payments are made in line with the original death benefit payment instructions. Depending on circumstances, payments may be made directly to beneficiaries or to a trust account.

Beneficiaries can inform us of a change to their bank account details or name, by completing and returning the Get your additional payment form that accompanies the Remediation Outcome Letter they have received.

Beneficiaries will also be required to provide certified proof of their identity (ID) for a change to their bank account or name. For a change to a bank account, beneficiaries (other than those overseas) can do this via electronic verification, which is explained in the form.

If beneficiaries need help with completing the form, please contact the Remediation Support team by:

• emailing remsupport@australiansuper.com
• calling on 03 9117 1205 or +61 3 9117 1205 (if living overseas), 9am to 5pm AEST/AEDT weekdays, or
• writing to:
  Remediation Support Team
  AustralianSuper
  Level 30
  130 Lonsdale Street
  MELBOURNE VIC 3000

Beneficiaries can return all completed forms and documents to AustralianSuper’s Remediation Support team.

These can be sent via post or email by:

• scanning these documents and sending them by email to remsupport@australiansuper.com
• posting these documents using the Reply Paid envelope (where provided) or sending them by mail to:
  Remediation Support Team
  AustralianSuper
  Level 30
  130 Lonsdale Street
  MELBOURNE VIC 3000

Where the investment switch was not processed as intended, but did not result in any financial loss to the deceased members account balance, no remediation will be offered.

AustralianSuper will assess who the remediation payment should be paid to in line with death benefit rules and will contact relevant parties as needed.

AustralianSuper will assess who the remediation payment should be paid to in accordance with legislation and Fund rules.

If a beneficiary opened an AustralianSuper Choice Income account with their death benefit payment, we’ll send them a letter informing them that the Remediation Payment will be deposited into the bank account linked to their Choice Income account (i.e. the bank account their pension payments are paid into).

If the beneficiary would like the Remediation Payment paid to a different bank account, they’ll need to complete and return the enclosed Additional payment form within 45 days from the date of the letter. They’ll also need to provide certified proof of their identity (ID) or they can do this via electronic verification (GreenID) as set out in the form.

Resident beneficiary

The payment amount forms part of the death benefit. When it is paid to a beneficiary that is not a dependant for tax purposes, any taxable component of the payment will be subject to tax. Where it is paid to a beneficiary that is a dependant for tax purposes, it will be tax-free. Where the payment is subject to tax, beneficiaries will be sent a PAYG payment summary within 14 days of payment which will show the amount of total tax withheld.

Non-resident beneficiary

Where the payment amount is paid to you as a beneficiary, and you are a foreign resident for Australian tax purposes, the payment will receive the same tax treatment as for a resident beneficiary (see directly above). This is because the payment is considered Australian sourced income. The main difference is that as a non-resident beneficiary, you should be exempt from the Medicare levy. However, if you have not provided a tax file number (TFN) to us, you may pay higher tax on any taxable component. If your country of tax residency has a double tax agreement with Australia, there may be no Australian tax imposed on the payment. Beneficiaries need to check the taxation laws of their country and whether it has a tax treaty with Australia.

Receiving a payment as the Legal Personal Representative (LPR) of a late member’s estate

The payment that you receive on behalf of the late member’s estate as LPR will count towards the non-concessional contributions cap of that late member for the financial year ending 30 June 2026 (see Non-concessional contributions cap section below).

In addition, as the payment will be paid to you as the LPR, you will be responsible for deducting the appropriate tax when the amount is distributed to beneficiaries. The Fund won’t withhold any tax on the payment. However, we’ll send you a payment summary showing the breakdown of the tax-free and/or taxable components that the payment comprises.

Non-concessional contributions cap

If you believe the late member may have exceeded their non-concessional contributions cap because of this payment, you may wish to lodge an Application – excess contributions determination (NAT 71333) with the ATO for their consideration, to have this payment disregarded for the purposes of the non-concessional contributions cap. This Application form can be accessed via the ATO’s website, ato.gov.au, by entering QC 20122 into the search facility. If you decide to apply to have the payment amount disregarded for the purposes of the late member’s non-concessional contributions cap, you need to include the following information with your application:

• the amount of the remediation payment received because of this error which has counted towards their non-concessional contributions cap
• a request to have this payment amount disregarded so that it does not count towards their non-concessional contributions cap/s for the relevant financial year/s, and
• a copy of the letter we sent you regarding your compensation payment.

Further information about non-concessional contributions, the non-concessional contributions cap and requesting to have non-concessional contributions disregarded or reallocated can be found on the ATO’s website by entering QC 23223, QC 73087 and QC 73090 into the search facility.

Beneficiaries can contact the Remediation Support Team by:

• email remsupport@australiansuper.com or
• calling 03 9117 1205 or +61 3 9117 1205 (if living overseas) from 9am to 5pm AEST/AEDT weekdays.

We’ll inform the beneficiary about the upcoming Remediation Payment via a letter. This will be sent by email if we have their email address. Accompanying the Remediation Outcome Letter will be an Update my details – beneficiary residing overseas form, which is required to be completed and returned to receive your Remediation Payment.

The form can be returned to us by:

• email to remsupport@australiansuper.com
• mail to:
  Remediation Support Team
  AustralianSuper
  Level 30
  130 Lonsdale Street
  MELBOURNE VIC 3000

The beneficiary can notify the Remediation Support team and we will respect their request and explain what happens next. If the beneficiary doesn’t want the Remediation Payment Benefit they are entitled to, the Remediation Support team will advise the beneficiary that:

• they must provide written confirmation of their refusal, and
• since the Remediation Payment is part of the Impacted Member’s death benefit, if they refuse to accept it, it will be paid to another dependant, legal personal representative, or if neither can be found, an individual (as determined by AustralianSuper).

If a beneficiary has a complaint, they should raise it with us first by:

• calling 1300300273 or +61 3 8617 9767 for overseas callers (8am to 8pm AEST/AEDT weekdays)
• emailing their complaint to complaints@australiansuper.com or via our website at australiansuper.com/help-and-support/make-a-complaint, or
• writing to the:
  Complaints Officer
  AustralianSuper
  GPO Box 1901
  MELBOURNE VIC 3001

We’ll acknowledge and investigate the complaint and address the concerns generally within 45 days. Beneficiaries can ask their assigned Complaints Officer for an update at any stage. If a beneficiary is not happy with our response, or they haven’t received a reply within the required timeframe, they can contact the external complaints resolution body, the Australian Financial Complaints Authority (AFCA). AFCA provides fair and independent financial services complaint resolution that is free to consumers.

Australian Financial Complaints Authority
GPO BOX 3, MELBOURNE VIC 3001, AUSTRALIA
Telephone: 1800 931 678 or 0061 1800 931 678 (if overseas)
Email: info@afca.org.au
Website: afca.org.au