The Federal Court has handed down a hefty fine to AustralianSuper, the nation’s largest super fund, for charging duplicate fees to tens of thousands of its customers over a decade.
The fine, totaling $27 million, comes after the Australian Securities and Investments Commission (ASIC) took the super fund to court in 2023.
What Happened?
It was found that about 90,000 members with multiple accounts were charged fees and premiums on each account, resulting in a collective loss of $69 million between July 2013 and March 2023.
This was due to AustralianSuper’s inadequate processes for detecting and combining multiple accounts held by a member.
A Self-Reported Issue
The issue was first identified in 2018, but it wasn’t until 2021 that AustralianSuper self-reported it to ASIC.
However, the three-year gap between becoming aware of the issue and reporting it raised concerns with ASIC, leading them to proceed with legal action.
ASIC’s Concerns
ASIC’s deputy chair, Sarah Court, expressed concerns about AustralianSuper’s conduct, stating that superannuation funds should prioritise their members’ interests and promptly address issues that cause them to face multiple fees and insurance premiums.
“We expect these issues to be identified and rectified quickly, including compensating members if a trustee has failed to comply with its obligations,” Ms. Court said.
AustralianSuper’s Response
AustralianSuper’s chief executive, Paul Schroder, apologized for the mistake and stated that the company has rectified the issue with its customers.
“We found this mistake, we reported it, we apologised to impacted members, we compensated them, and we’ve improved our processes to prevent this happening again,” Mr. Schroder said.
He also acknowledged that multiple member accounts are a problem across the industry and that AustralianSuper’s process wasn’t comprehensive enough to meet its obligations to members.
The Fine and Beyond
In addition to the $27 million fine, AustralianSuper will also pay ASIC’s legal costs, capped at $500,000.
With over $340 billion in assets under management and 3.4 million members, AustralianSuper has a significant responsibility to its customers.
The company has committed to reviewing and improving its services to provide members with the support and guidance they expect and deserve.