Australia’s largest industry superannuation provider, AustralianSuper, has been fined $27 million for failing to notify members of their duplicate accounts.
Federal Court Justice Lisa Hespe ruled that the company violated the Superannuation Industry Act.
Between July 2013 and June 2022, over 90,000 members had multiple accounts that should have been merged, resulting in approximately $69 million in losses due to excessive administration fees, insurance premiums, and lost investment earnings.
Justice Hespe called the failure inexcusable, stating that AustralianSuper lacked the necessary processes and systems to ensure compliance with legislative requirements.
AustralianSuper admitted the issue and reported it to the Australian Securities and Investment Commission (ASIC) in December 2021, cooperating throughout the investigation.
The penalty of $27 million was deemed appropriate by both ASIC and AustralianSuper to deter other superannuation fund trustees from neglecting their duties to act in members’ best financial interests.
AustralianSuper’s CEO, Paul Schroder, apologized for the oversight, acknowledging the mistake and assuring that affected members were compensated.
The company has since taken remedial action and continues to review its processes to better serve its 3.5 million members.
