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The corporate watchdog is taking legal action against AustralianSuper, the country’s largest superannuation fund, for failing to identify and merge duplicate accounts for about 90,000 members, charging them multiple sets of fees and insurance premiums.
On Friday, Australian Securities and Investments Commission (ASIC) deputy chair Sarah Court said the regulator had commenced civil penalty proceedings against the trustee of AustralianSuper over problems that resulted in members being overcharged $69 million.
ASIC deputy chair Sarah Court said the failure to merge duplicate accounts eroded members’ superannuation balances over time.Credit: Alex Ellinghausen
ASIC alleged that for nearly 10 years, the super fund, failed to have adequate policies and procedures to identify members who held multiple AustralianSuper accounts and to merge those accounts where a merger was in the member’s best interests.
“Failing to merge duplicate accounts within a fund can have significant financial consequences for members who end up paying multiple sets of fees, eroding their superannuation balance over time,” Court said.
It is the first case that ASIC has brought in its capacity as co-regulator with the Australian Prudential Regulation Authority (APRA) alleging a breach of a section of the Superannuation Industry (Supervision) Act 1993 relating to trustees’ duties.
ASIC said AustralianSuper – which revealed the overcharging in May this year – was allegedly aware in 2018 of the number of duplicate accounts within the fund and possible gaps in its policies and procedures, but did not take adequate steps to investigate and resolve the issue until late 2021 and early 2022.
“ASIC expects that superannuation funds will put their members first and promptly address issues that cause members to face multiple sets of fees and insurance premiums,” Court said. “We expect these issues to be identified and rectified quickly, including compensating members if a trustee has failed to comply with its obligations.”
ASIC also said unintended multiple accounts remained an issue for about 3 million Australian consumers as at June 2022. About half a million people have two or more accounts in the same fund.