Australia’s largest superannuation fund, AustralianSuper, has been hit with a $27 million fine after the Federal Court found it had charged duplicate fees to tens of thousands of customers, eroding their retirement savings.
Court Ruling and Penalty
The Australian Securities and Investments Commission (ASIC) launched legal action against AustralianSuper in 2023, accusing the fund of failing to merge accounts in members’ best interests. As a result, more than 48,000 customers were charged unnecessary duplicate fees.
On Friday, Justice Lisa Hespe ruled against AustralianSuper in the Federal Court in Melbourne, imposing the $27 million penalty and ordering the fund to cover ASIC’s legal costs of up to $500,000.
Additionally, AustralianSuper must display a mandatory message on its website and member login screens detailing the court decision. The court specified the font, size, color, and placement of this message.
ASIC’s Allegations and AustralianSuper’s Response
ASIC alleged that from 2013 to 2023, around 90,000 members were affected, with approximately $69 million in super funds lost due to duplicate fees—equating to about $650 per customer.
AustralianSuper self-reported the issue and agreed to compensate affected members before the case reached court. However, ASIC proceeded with legal action, criticizing the fund for taking three years to flag the issue after discovering it.
AustralianSuper CEO Paul Schroder acknowledged the mistake, emphasizing that steps had been taken to prevent future occurrences.
“We found this mistake, we reported it, we apologized to impacted members, we compensated them, and we’ve improved our processes to prevent this happening again,” Schroder stated.
He also confirmed that the fine was accounted for in the fund’s budget and would not result in increased fees for members.
Industry-Wide Concerns
ASIC deputy chair Sarah Court underscored the regulator’s expectations for super funds to act swiftly in addressing fee-related issues.
“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.
AustralianSuper, which manages $341 billion in retirement savings for around one in every eight Australian workers, added $26.7 billion to its members’ savings last year.
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