[Australia] Nation’s biggest super fund incurs massive fine

Australia's largest industry superannuation provider has been hit with a $27 million fine for failing to notify members of their duplicate accounts, 9News reports.

On February 21, Federal Court Justice Lisa Hespe ruled against AustralianSuper, finding it contravened the Superannuation Industry Act.

The provider reportedly admitted that between July 2013 and June 2022, more than 90,000 of its members had multiple accounts that should have been merged.

Those members incurred approximately $69 million in losses as a result of this failure; through multiple administration fees, insurance premiums and lost investment earnings.

In her judgement, Justice Hespe said, "AustralianSuper is Australia's largest industry superannuation fund.

"It is inexcusable for it to not have had processes and systems in place to ensure compliance with a specific legislative requirement."

AustralianSuper reported the issue to the Australian Securities and Investment Commission in December 2021. Justice Hespe noted that the company cooperated during the investigation and federal court proceedings.

ASIC and AustralianSuper jointly submitted that the $27 million penalty was appropriate and Justice Hespe reportedly agreed.

"The penalties in this case need to be large enough to deter other superannuation fund trustees from failing to diligently discharge their duties to act in members' best financial interests," she said.

"I am satisfied that AustralianSuper is unlikely to engage in this contravention again given the remedial action it has taken and its acceptance of its wrongdoing."

Paul Schroder - AustralianSuper's chief executive - apologised, saying the company had noted the mistake and compensated affected members.

"Multiple member accounts are a problem across our industry and for several years our process wasn't comprehensive enough to meet our obligations to members," Mr Schroder said in a statement.

"We've fixed that now and we continue to review and improve our services, so we provide members with the support and guidance they expect and deserve."

AustralianSuper reportedly has a membership of more than 3.5 million members and is responsible for 14.6 per cent of member accounts across Australia.

Source: 9News

(Quotes via original reporting)

Australia's largest industry superannuation provider has been hit with a $27 million fine for failing to notify members of their duplicate accounts, 9News reports.

On February 21, Federal Court Justice Lisa Hespe ruled against AustralianSuper, finding it contravened the Superannuation Industry Act.

The provider reportedly admitted that between July 2013 and June 2022, more than 90,000 of its members had multiple accounts that should have been merged.

Those members incurred approximately $69 million in losses as a result of this failure; through multiple administration fees, insurance premiums and lost investment earnings.

In her judgement, Justice Hespe said, "AustralianSuper is Australia's largest industry superannuation fund.

"It is inexcusable for it to not have had processes and systems in place to ensure compliance with a specific legislative requirement."

AustralianSuper reported the issue to the Australian Securities and Investment Commission in December 2021. Justice Hespe noted that the company cooperated during the investigation and federal court proceedings.

ASIC and AustralianSuper jointly submitted that the $27 million penalty was appropriate and Justice Hespe reportedly agreed.

"The penalties in this case need to be large enough to deter other superannuation fund trustees from failing to diligently discharge their duties to act in members' best financial interests," she said.

"I am satisfied that AustralianSuper is unlikely to engage in this contravention again given the remedial action it has taken and its acceptance of its wrongdoing."

Paul Schroder - AustralianSuper's chief executive - apologised, saying the company had noted the mistake and compensated affected members.

"Multiple member accounts are a problem across our industry and for several years our process wasn't comprehensive enough to meet our obligations to members," Mr Schroder said in a statement.

"We've fixed that now and we continue to review and improve our services, so we provide members with the support and guidance they expect and deserve."

AustralianSuper reportedly has a membership of more than 3.5 million members and is responsible for 14.6 per cent of member accounts across Australia.

Source: 9News

(Quotes via original reporting)