Kristian Fok, the super CEO of Cbus, will appear before the Senate Economic Reference Committee today.
For some months the Senate had been planning to bring Cbus before the Senate Economic Committee along with prudential regulator APRA, Housing Australia and various other superannuation funds in connection with a special inquiry to look into housing issues.
Senators have questions about a range of issues relating to Cbus, including ASIC’s latest allegations of failed insurance claims handling procedures.
This appearance follows a lawsuit filed on Tuesday by the Australian Securities and Investments Commission (ASIC), which accuses Cbus of failing to process more than 10,000 death and disability claims in a timely manner, resulting in an estimated financial loss of $20 million.
ASIC says more than half of Cbus requests have experienced delays in processing, with some cases unresolved for more than a year. Sarah Court, deputy president of ASIC, highlighted the impact of these delays, saying: “Delays in processing claims cause real harm to families who may be relying on payments to meet critical expenses,” and added that these delays have increased the distress of grieving families and individuals with disabilities.
Cbus, which holds approximately $94 billion in assets and serves more than 920,000 members, is a leading industry super fund focused on building and construction workers. Positioned as a profit-making fund for members, Cbus manages retirement savings and insurance benefits for employees, offering default insurance coverage for high-risk occupations. The Construction, Forestry and Maritime Employees Union (CFMEU) has a significant interest in the fund, with three trustees and a 21% ownership stake.
In response to ASIC’s allegations, Cbus apologized for the delays and announced a compensation scheme for affected members. The fund blamed the problems on delays by an external claims administrator and has since implemented measures to improve processing times. Cbus also called on ASIC to consider alternative dispute resolution as a way to avoid lengthy disputes.