Australia’s largest super fund is being sued over allegations it failed to act on duplicate accounts, costing 90,000 members $69m.
On Friday, the Australian Securities and Investments Commission (ASIC) began legal action against the trustees of AustralianSuper, alleging it failed to implement policies to identify and merge members who had multiple accounts.
It is alleged they were subject to multiple sets of fees and insurance premiums, with affected AustralianSuper members losing about $69m between July 1, 2013 and March 31, 2023.
ASIC deputy chair Sarah Court said failing to merge multiple accounts could have “significant financial consequences,” and can slowly erode someone’s superannuation balance.
“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,” she 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 alleges the super giant was made aware of the issue of duplicate accounts in 2018, including potential gaps in its policies and procedures.
However, it allegedly didn’t take “adequate steps” to investigate and resolve the issue until late 2021 to early 2022.
The regulator also alleges the super fund failed to perform its duties and exercise its powers as a superannuation trustee in the best interests of its members.
An AustralianSuper spokesperson said the fund would work with ASIC to “bring these proceedings to a resolution”.
“AustralianSuper regrets that its processes to identify and combine multiple accounts did not cover all instances of multiple member accounts,” they said.
“This should not have happened, and we apologise unreservedly to members.”
It said it has “fully co-operated” with ASIC and the Australian Prudential Regulation Authority (APRA) and had now strengthened the processes around identifying and minimising multiple accounts.
“AustralianSuper self-reported this issue and has fully co-operated with ASIC and APRA on this matter and, separately, with ASIC for its 2022 industry review of the management of multiple member accounts,” they said.
“AustralianSuper implemented a member remediation program for this matter earlier this year, which is now substantially complete.”
While the first case management hearing has yet to be scheduled, ASIC says it will be seeking declarations, pecuniary penalties and other orders against AustralianSuper.
According to ASIC, about 3m Australians have multiple superannuation accounts as of June 30, 2022.
According to data from the Australian Taxation Office from May 31, 2023, more than 500,000 members have two or more accounts within the same fund.