AustralianSuper has announced that it will refund its members a total of approximately $70 million due to an issue with the super fund’s processes for managing multiple accounts.
The fund said that it regularly identifies and combines multiple accounts held by its members to help them avoid extra fees. However, following a comprehensive review, AustralianSuper determined that its processes did not cover all instances of multiple member accounts.
“This should not have happened, and we apologise unreservedly to members. The fund is taking appropriate remediation actions and has self-reported the issue to the regulators,” AustralianSuper said in a statement on Friday.
Approximately 100,000 impacted and former members will be contacted over the coming months to inform them of the issue and outline the actions the fund is taking in response.
“AustralianSuper’s aim is to return these members to the financial position they would be in now if this hadn’t occurred,” the fund said.
“This may include refunding administration fees and any insurance costs deducted from impacted members’ secondary account, along with lost earnings on these amounts.”
The fund confirmed that the cost of the remediation will be paid from its operational risk financial reserve and will not lead to an increase in administration fees. The average payment to remediate is expected to be $650 per impacted member.
Furthermore, AustralianSuper noted that it has strengthened its processes around managing multiple accounts for all members to help ensure that instances where a member has more than one account are identified and appropriate actions are taken in a timely way.
AustralianSuper has 3.1 million members and a total of almost $290 billion in assets under management as of 31 March.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.