AFCA transition paper confirms complexity

The consultation paper developed to cover the transitional arrangements leading up to the creation of the Australian Financial Complaints Authority (AFCA) has confirmed the degree of complication involved in replacing the Superannuation Complaints Tribunal (SCT) and moving to the ombudsman model.

The Government has only allowed two weeks for the industry to respond to the discussion paper developed by the by the Government’s appointed expert, Dr Malcolm Eady.

But what the discussion paper confirms is the complexity entailed in moving from the SCT model and to the ombudsman model entailed in the AFCA, particularly the transitionary arrangements.

After outlining the transitionary challenges, the discussion paper then posed the question: “What additional arrangements could be put in place to facilitate the transition of complaints that were lodged with the SCT prior to 1 July 2018, but are not yet ‘dealt with’, to be considered by AFCA? At what point could a complaint be considered to be ‘dealt with’ by the SCT?”

The Edey consultation paper directly referred to the superannuation industry’s concerns around the transitionary arrangements, noting that “stakeholders have indicated that there may be inefficiencies if a complaint that is currently being considered by the SCT is withdrawn and considered afresh by AFCA”.

“This inefficiency becomes larger the further the complaint progresses with the SCT and more resources have been devoted to its resolution. Conversely, complainants who have not had their complaint progress with the SCT may wish to withdraw their complaint and have it considered by AFCA, rather than waiting for the SCT to resolve its backlog of complaints,” the consultation paper said.

It said it would be important for both the SCT and AFCA to have appropriate arrangements in place to manage the withdrawal of complaints effectively. It will also be important for the SCT and AFCA to provide information to complainants about when a complaint can and cannot be heard by each body during the transition period, and what the consequences of a withdrawal of a complaint from the SCT may be.

“For example, if a complaint is withdrawn from the SCT and lodged with AFCA, time limits that apply to the complaint may have been exceeded,” the paper said. “To the extent that AFCA’s terms of reference may exclude consideration of complaints that have been ‘dealt with’ by a predecessor scheme, the point at which a complaint is considered to be ‘dealt with’ by the SCT will need to be clearly defined.”

Additionally, it said that it would be important to consider what information could be exchanged between the SCT and AFCA, given the statutory provisions in the Superannuation (Resolution of Complaints) Act 1993.