A combination of cultural, physical and literacy barriers has meant the Indigenous experience with superannuation has been akin to “trying to swim upstream in a river that’s really, really heavy and hard”, the royal commission heard on Monday.

That’s according to Lynda Edwards, the co-ordinator of financial capability at Financial Counselling Australia, speaking in a statement.

The problem is, it can get so difficult that those attempting to navigate the system and access their entitlements give up, “losing out on things that could actually benefit [them]”, counsel assisting Rowena Orr said, quoting Mrs Edwards’ statement.

This in turn has led to the superannuation balances 23 per cent lower than non-Indigenous Australians and mean balances at retirement 46 per cent lower than the Association of Superannuation Funds of Australia (ASFA) comfortable retirement benchmark.

“I think the funds can do more,” QSuper executive Lyn Melcer told the commission.

“But I think it's because they [funds] just don't know,” she continued, explaining how she used to think her fund treated all members equally.

Ms Melcer said a visit to far north Queensland highlighted the fact that “equal isn’t the same for everybody”.

According to QSuper’s analysis, there are 5,648 Indigenous members in Queensland’s largest fund, based off an estimation of the racial makeup of those living in certain remote communities.

Ms Melcer acknowledged that this is a “pure estimation” and that the fund doesn’t collect racial data as it doesn’t believe in collecting personal data unless there is a genuine use for it.

She said funds need to understand who their members are beyond race, given the sheer diversity within Indigenous Australians.

Funds need to understand the different kinship structures that make bequeathing superannuation a different process, and the cultural naming conventions that can see individuals have up to three names; a skin name, a birth name and an adoptive name.

According to a statement from ASIC analyst Nathan Boyle, it’s not uncommon to have identification documents with all three names and even dates of birth.

Quoting his and Ms Edwards’ statements, Ms Orr told the commissioner that government departments use 1 July or 1 December as default birthdays for documents issued a significant time after the person is born.

“This may lead to a situation in which both a government attributed birthday and a person's actual birthday are listed on different forms of identification documents,” she said.

“Mrs Edwards' evidence was that most financial counsellors working with Aboriginal and Torres Strait Islanders spend the majority of their day's work trying to help these people prove their identity.”

That’s before the issues of rural communities’ access to financial services and doctors for insurance claims are brought in. Then there’s the level of financial literacy required to navigate documents even the corporate regulator considers too complex.

Superannuation funds have a responsibility

However, the numerous challenges aren’t a good-enough excuse for funds to give up, Ms Melcer told the commission. Commenting on a trip QSuper took to Lockhart River in Queensland and the steps taken to reunite Indigenous Australians with their lost super, Ms Melcer was firm that reuniting super was the role of the fund.

“It is our job to relocate members with their money and improve access to our members. It's what we do. It's what we're supposed to do. And so it's really nothing extra,” she said.

Following the trip to Lockart River, QSuper analysed their data and consolidated duplicate records for members by comparing details like birth-dates and post-codes and contacting electoral offices to find updated addresses. The electoral office also told them about members who were deceased, which led QSuper to communicate with the births, deaths and marriages registry to begin the process of passing along the superannuation money, and to inform relevant members about this process.

The process, which also included phone calls and different communications strategies ended up reuniting 80 people with more than $2 million in superannuation, and paying out 17 estates valued at $1.7 million.

However, responding to Ms Orr’s suggestion that the process was a “significant amount of work”, Ms Melcer was adamant that all super funds have a responsibility to take similar steps.

“Money has to be paid into a superannuation fund. People have no choice about superannuation, they need to go somewhere,” she said.

“So clearly we're obligated to make sure that people can get the money when they need it. In the situations we're talking about, particularly in remote and far remote communities, they need their money. So of all the people who probably need it, this is the category of member who needs to be able to access it.

“And it is our systems, as in the industry systems, that we've made it difficult for people. So it is also incumbent upon us to help everybody work through the systems we've created.”

We continue our rolling coverage of the royal commission here.