Australia’s largest superannuation fund, AustralianSuper, has been fined $27 million after it was found guilty of charging duplicate fees to tens of thousands of customers.
The Australian Securities and Investments Commission (ASIC) initiated legal action against the fund in 2023, alleging that it failed to merge accounts in the best interests of its members, allowing unnecessary fees to erode their retirement savings.
On Friday, AustralianSuper and ASIC appeared in the Federal Court in Melbourne, where Justice Lisa Hespe delivered her ruling. In addition to the $27 million penalty, AustralianSuper was also ordered to cover ASIC’s legal costs of up to $500,000.
After the hearing, AustralianSuper chief executive Paul Schroder stated the fund had taken measures to prevent a recurrence of the issue.
“We identified the mistake, reported it, apologised to affected members, provided compensation, and enhanced our processes to ensure it doesn’t happen again,” he said.
Mr. Schroder also clarified the fine would not result in increased fees for members, as the fund had allocated funds within its budget to cover the penalty.
ASIC took legal action against AustralianSuper, claiming that 90,000 members were impacted between 2013 and 2023, with approximately $69 million in super funds lost to duplicate fees.
On average, each affected customer lost around $650 due to the fund’s negligence.
While AustralianSuper self-reported the issue and agreed to compensate members before the case reached court, ASIC proceeded with legal action, arguing that the fund’s three-year delay in addressing the problem was unacceptable.
The breaches of the Superannuation Industry Act and Corporations Act occurred between 2019 and 2023, with ASIC asserting that AustralianSuper failed to take timely action to resolve the issue.
During a brief court hearing on Friday, Justice Lisa Hespe ruled that AustralianSuper must prominently display a notice about the court’s decision on its website and on the first screen members see upon logging in.
The order outlines specific requirements for the font, size, color, and placement of the message to ensure its visibility.
No oral submissions were made by either party’s lawyers during the hearing.
In a statement, AustralianSuper’s chief executive reiterated that the issue was self-reported, affected members had been compensated, and system improvements had been implemented to prevent it from recurring.
“Duplicate member accounts are a widespread issue in our industry, and for several years, our processes were not thorough enough to fully meet our obligations to members. We have since addressed this and continue to review and enhance our services to ensure members receive the support and guidance they expect and deserve,” Mr. Schroder said.
He also confirmed the court-ordered penalty had been accounted for in forward budgeting and that no fee increases were implemented to cover the fine.
Last year, AustralianSuper contributed $26.7 billion to Australians’ retirement savings.
When the case was filed, ASIC Deputy Chair Sarah Court emphasized the regulator’s expectations for superannuation funds.
“ASIC expects super funds to prioritize their members and swiftly resolve issues that result in multiple fees and insurance premiums,” she said.
“We expect these problems to be identified and addressed promptly, including compensating members when a trustee fails to meet its obligations.”
