The new Australian Financial Complaints Authority (AFCA) will take over the work of three external dispute resolution schemes and be able to consider claims of higher value when it comes into being in November, 2018.
AFCA will replace the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal.
They hear disputes involving banking, credit, insurance, investment and superannuation. Members of these industries pay fees that fund the schemes.
Industry members of FOS and the CIO will have to retain those memberships for 12 minutes after AFCA opens its doors, so existing matters can be processed.
Baby boomers are moving into retirement and starting to use some substantial superannuation balances, but most of the conversation around super is about building savings.
The financial industry is on notice from the Productivity Commission that it will investigate transition to retirement and pension products in its inquiry into the competitiveness and efficiency of the super system.
“The Commission intends to assess whether the system is meeting the needs of members during these phases, including via product innovation that addresses tax effectiveness, transition and longevity risks,” says the Commission in its draft report released this month.
More Australians plan to live on their superannuation savings rather than the age pension.
When the Australian Bureau of Statistics surveyed 3.8 million workers on their plans for retirement, it found 53% of the group – all people aged over 45 years – expected their main source of retirement income to be super, an annuity or an allocated pension.
Only 19% of those who have actually retired tapped superannuation as their main source of income.