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$37bn fund to take Iress to court
In a statement to the ASX on Monday, Iress confirmed the board of ESSSuper has commenced civil proceedings in the Federal Court against Iress and its wholly owned subsidiary Financial Synergy Holdings Pty Ltd.
This is due to an existing dispute pursuant to the Platform Services Agreement between the parties, it said.
“Iress denies the claims made against it and will file a defence in accordance with the court’s timetable,” the statement said.
“Iress continues to provide the contracted services to ESSSuper. Iress will update shareholders as appropriate.”
ESSSuper chair Joan Fitzpatrick also said the fund commenced proceedings, citing material breaches of contract and pre-contractual misrepresentations that have ultimately impacted its members.
In a statement to Super Review, she said: “Iress was contracted to provide technology systems to assist the ESSSuper to administer the fund. Since entering into the contract, there have been numerous incidents and breaches by Iress which ESSSuper has sought to have rectified through direct engagement and through using the dispute mechanism clauses in the contract.”
ESSSuper members have been “significantly inconvenienced”, she said, and the fund has suffered “loss and damage as it has been forced to spend time and money, and engage third parties, to rectify the incidents and breaches caused by Iress”.
As a member-focused fund, ESSSuper does not enter into litigation lightly, she said.
“However, given the ongoing lack of resolution in response to our clearly articulated concerns, and the significant inconvenience to members and the fund, the board has no alternative but to issue these proceedings. The ESSSuper Board has a legislative duty to protect the rights and interests of our members,” Fitzpatrick said.
Last year, the $37 billion fund said that a reporting error by Iress had affected around 9 per cent of its members.
In a significant event notice published on 14 March, it said Iress had reported an incorrect contribution amount to the Australian Taxation Office (ATO) for the 2021–22 financial year, causing the ATO to issue an Excess Concessional Contributions Notice with that incorrect amount.
The platform administrator subsequently provided the correct reporting for FY22 on 18 March 2023. Following this, the ATO began issuing new Notices of Assessment and/or Account Statements and any remaining debt or refund.
Iress and ESSSuper had previously entered into an agreement regarding an automated administration service in late 2019, with the technology firm to deliver the service called Automated Super Admin.
At the time, Iress said this would include services like a core transactional and record-keeping platform; real-time access to transactions and data for members, employers, advisers, and the fund’s service teams including through an online portal; automation of workflows and back-end administration; and an optional fund accounting service, among other services.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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