The trustee of Australia's largest superannuation fund, AustralianSuper, will pay a A$27m ($17.1m) penalty after the Australian federal court found that it failed to merge multiple member accounts.
The court held this to be a breach of the fundamental duties and obligations AustralianSuper owed to its members, and that it was inexcusable for the trustee to not have had the processes and systems in place to ensure compliance.
“AustralianSuper’s failures to comply with S108A for almost nine years after the section came into effect, to identify its non-compliance and to take steps to remedy that non-compliance were systemic failings and as explained above, were the result of failing to have appropriate systems and processes in place,” Australian federal court justice Hespe said.
“The failures should not have happened. The failures are serious and highly concerning.”
Said Australian Securities and Investments Commission (ASIC) deputy chair Sarah Court, “This penalty reflects the severity of the misconduct by Australia’s largest superannuation fund which betrayed the trust of its members and did not act in their best financial interests.
“This was exacerbated by a systemic failure to escalate and remediate the issue once it was identified. Improving services to superannuation fund members is a strategic priority for ASIC and we will continue to take strong action where we consider that members are not getting the service they deserve from their superannuation trustees.”
In the period 1 July 2013 to 31 March 2023, approximately 90,700 AustralianSuper members had multiple accounts that should have been merged. These members incurred approximately A$69m in losses through multiple administration fees, insurance premiums and lost investment earnings.
All affected members have been remediated.
This was the first case that ASIC has brought in its capacity as a co-regulator with APRA alleging contraventions of section 52 of the Superannuation Industry (Supervision) Act 1993 (Cth).