ASIC has commenced civil penalty proceedings against the trustee of Australia’s largest superannuation fund, AustralianSuper, alleging failures to address multiple member accounts.
ASIC alleges that for almost ten years, AustralianSuper failed to have adequate policies and procedures to identify members who held multiple AustralianSuper accounts and to merge those accounts, where merger was in the member’s best interests.
AustralianSuper then continued to charge multiple sets of fees and insurance premiums to these members.
ASIC Deputy Chair Sarah Court said, ‘Failing to merge duplicate accounts within a fund can have significant financial consequences for members who end up paying multiple sets of fees, eroding their superannuation balance over time.’
Between 1 July 2013 and 31 March 2023, approximately 90,000 AustralianSuper members were affected, with total cost to members of approximately $69 million.
ASIC is concerned that despite AustralianSuper allegedly being aware in 2018 of the number of multiple member accounts within the fund and possible gaps in its policies and procedures, it did not take adequate steps to investigate and resolve the issue until late 2021 and early 2022.
‘ASIC expects that superannuation funds will put their members first and promptly address issues that cause members to face multiple sets of fees and insurance premiums. We expect these issues to be identified and rectified quickly, including compensating members if a trustee has failed to comply with its obligations,’ Ms Court added.
ASIC claims that, between 2019 and 2023, AustralianSuper failed to:
set out a procedure to identify and merge multiple accounts of members in accordance with section 108A of the Superannuation Industry Act,
efficiently identify, escalate and rectify the ongoing failure to comply with that section and remediate affected members,
promptly identify and merge multiple accounts in accordance with the required procedures,
do all things necessary to ensure its financial services were provided efficiently, honestly and fairly,
exercise the same degree of care, skill and diligence as a prudent superannuation trustee would have exercised, and
perform its duties and exercise its powers as a superannuation trustee in the best interests of its members.
ASIC is seeking declarations, pecuniary penalties and other orders against AustralianSuper.
The date for the first case management hearing is yet to be scheduled.