Australia’s largest super fund is being sued over allegations it failed to act on duplicate accounts, costing 90,000 members $69m.
On Friday, the Australian Securities & Investments Commission (ASIC) commenced legal action against the trustees of AustralianSuper, alleging it failed to implement policies to identify and merge members who had multiple accounts.
It is alleged they were subject to multiple sets of fees and insurance premiums, with affected AustralianSuper members losing about $69m between July 1, 2013 and March 31, 2023.
ASIC Deputy Chair Sarah Court said failing to merge multiple accounts can have “significant financial consequences,” and can slowly erode someone’s superannuation balance.
“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,” she said.
“We expect these issues to be identified and rectified quickly, including compensating members if a trustee has failed to comply with its obligations.”
ASIC allege the super giant was made aware of the issue of duplicate accounts in 2018, including the issue of duplicate accounts, and potential gaps in its policies and procedures.
However it allegedly didn’t take “adequate steps” to investigate and resolve the issue until late 2021 to early 2022.
The regulator also alleges the super fund failed to perform its duties and exercise its powers as a superannuation trustee in the best interests of its members.
While the first case management hearing has yet to be scheduled, ASIC says it will be seeking declarations, pecuniary penalties and other orders against AustralianSuper.
According to ASIC, about 3m Australians have multiple superannuation accounts as of June 30, 2022. According to data from the Australian Taxation Office (ATO) from May 31, 2023, more than 500,000 members have two or more accounts within the same funds.
AustralianSuper has been contacted for comment.