In a judgment delivered on 21 February, the country’s largest fund was given 30 days to pay a pecuniary penalty of $27 million, and 14 days to publish a notice on its website and mobile app, informing members about the court ruling on the failure to merge duplicate accounts.
AustralianSuper is also required to pay the Australian Securities and Investments Commission’s (ASIC) costs related to the case, not exceeding $500,000, within 30 days.
Back in September 2023, ASIC said it had commenced civil penalty proceedings against the trustee of Australia’s largest superannuation fund, AustralianSuper, alleging failures to address multiple member accounts.
At the time, ASIC alleged that between 1 July 2013 and 31 March 2023, approximately 90,000 AustralianSuper members were affected, with total cost to members reaching approximately $69 million.
The corporate regulator also highlighted that AustralianSuper knew about multiple member accounts as early as 2018 but did not take proper action to resolve the issue until late 2021 or early 2022.
Also at the time, a spokesperson for AustralianSuper said the fund “regrets that its processes to identify and combine multiple accounts did not cover all instances of multiple member accounts”.
“This should not have happened, and we apologise unreservedly to members.”
On Friday, the Federal Court said AustralianSuper breached its duties to over 90,000 beneficiaries between 2019 and 2023 by failing to promptly identify and merge multiple accounts or remediate affected members. These failures contravened sections of the Superannuation Industry (Supervision) Act (SIS Act), as well as the Corporations Act.
Specifically, according to court documents, AustralianSuper did not exercise the care and diligence expected of a prudent trustee and failed to act in the best interests of its members, leading to significant regulatory violations. The fund also failed to establish proper procedures for managing multiple accounts, further violating the Corporations Act.
Responding to the outcome on Friday, the fund said in a statement it took immediate action by reporting the issue to regulators, compensating affected members, and improving its processes to prevent future occurrences.
“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,” AustralianSuper chief executive Paul Schroder said.
“Multiple member accounts are a problem across our industry and for several years our process wasn’t comprehensive enough to meet our obligations to members. We’ve fixed that now and we continue to review and improve our services, so we provide members with the support and guidance they expect and deserve.”
The fund clarified that a provision was made for an expected penalty in FY2023–24 accounts, adding that member administration fees have not been increased to cover it.
