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AustralianSuper hit with $27 million penalty
The Federal Court has ordered AustralianSuper to pay $27 million for failures to address multiple member accounts.
In a judgement delivered on 21 February, the country’s largest fund has been given 30 days to pay a pecuniary penalty of $27 million, and 14 days to publish a notice on its website and mobile app, informing members about the court ruling on the failure to merge duplicate accounts.
AustralianSuper is also required to pay ASIC’s costs related to the case, not exceeding $500,000, within 30 days.
Back in September 2023, the Australian Securities and Investments Commission (ASIC) said it had commenced civil penalty proceedings against the trustee of Australia’s largest superannuation fund, AustralianSuper, alleging failures to address multiple member accounts.
At the time, ASIC alleged that between 1 July 2013 and 31 March 2023, approximately 90,000 AustralianSuper members were affected, with total cost to members reaching approximately $69 million.
The corporate regulator also highlighted that AustralianSuper knew about multiple member accounts as early as 2018 but did not take proper action to resolve the issue until late 2021 or early 2022.
Also at the time, a spokesperson for AustralianSuper said the fund “regrets that its processes to identify and combine multiple accounts did not cover all instances of multiple member accounts".
"This should not have happened, and we apologise unreservedly to members”.
On Friday, the Federal Court said that AustralianSuper breached its duties to over 90,000 beneficiaries between 2019 and 2023 by failing to promptly identify and merge multiple accounts or remediate affected members. These failures contravened sections of the Superannuation Industry (Supervision) Act (SIS Act), as well as the Corporations Act.
Specifically, according to court documents, AustralianSuper did not exercise the care and diligence expected of a prudent trustee and failed to act in the best interests of its members, leading to significant regulatory violations. The fund also failed to establish proper procedures for managing multiple accounts, further violating the Corporations Act.
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