ASIC has launched legal proceedings against AustralianSuper, Australia’s largest superannuation fund. 

ASIC alleges a prolonged failure by AustralianSuper to manage multiple member accounts, leading to financial harm for thousands.

ASIC's claims point to nearly a decade of neglect, accusing AustralianSuper of lacking adequate protocols to detect and consolidate members holding multiple accounts, thereby allowing the fund to charge numerous fees and insurance premiums to these individuals.

“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,” said ASIC's Deputy Chair, Sarah Court.

Between July 1, 2013, and March 31, 2023, approximately 90,000 AustralianSuper members were affected, incurring a collective cost of around $69 million.

ASIC is troubled by AustralianSuper's alleged awareness of these issues in 2018, yet insufficient action was taken 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. 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 added.

ASIC's claims against AustralianSuper include the alleged failure to:

  • Establish a procedure to identify and merge multiple member accounts as per section 108A of the Superannuation Industry Act

  • Efficiently detect, escalate, and rectify the ongoing non-compliance and compensate affected members

  • Promptly identify and merge multiple accounts in line with required procedures

  • Ensure the provision of financial services in an efficient, honest, and fair manner

  • Exercise the same level of care, skill, and diligence as a prudent superannuation trustee

  • Act in the best interests of its members while performing duties and exercising powers

ASIC is seeking declarations, monetary penalties, and other actions against AustralianSuper. A date for the initial case management hearing is pending.

This marks ASIC's first case as a co-regulator with APRA, alleging violations of section 52 of the Superannuation Industry (Supervision) Act 1993 concerning trustee duties.

Multiple unintended accounts remain a significant issue for Australian consumers. As of June 30, 2022, approximately three million individuals held multiple superannuation accounts, with over half a million members having two or more accounts within the same fund, as of May 31, 2023, per ATO data.

AustralianSuper, boasting 2.87 million members and $258 billion in assets as of June 30, 2022, is addressing members with multiple accounts from June 30, 2014, through March 31, 2023. 

In December 2022, AustralianSuper self-reported a potential compliance lapse to ASIC, leading to its inclusion in ASIC's broader trustee practice review published in June 2023. 

The review identified poor practices causing harm to consumers.