Australia's biggest super fund hit with massive fine

AustralianSuper, Australia's largest industry superannuation provider, has been fined AUD 27 million for failing to notify members about their duplicate accounts. Federal Court Justice Lisa Hespe handed down the ruling on Friday, finding that AustralianSuper contravened the Superannuation Industry (Supervision) Act 1993.

The company admitted that, between July 2013 and June 2022, more than 90,000 of its members held multiple accounts that should have been consolidated. As a result, these members suffered losses of approximately AUD 69 million due to multiple administration fees, insurance premiums, and lost investment earnings.

In her judgment, Justice Hespe stated, "AustralianSuper is the largest industry superannuation fund in Australia. Its failure to establish processes and systems to ensure compliance with specific legislative requirements is inexcusable." AustralianSuper reported the issue to the Australian Securities and Investments Commission (ASIC) in December 2021, and Justice Hespe noted the company's cooperation during the investigation and Federal Court proceedings.

ASIC and AustralianSuper jointly submitted that a penalty of AUD 27 million was appropriate, which Justice Hespe agreed with. "The penalty in this case needs to be sufficiently large to deter other superannuation trustees from failing to diligently discharge their duties to act in the best financial interests of their members," she said. "I am satisfied that, given the remedial steps AustralianSuper has taken and its acknowledgement of wrongdoing, it is unlikely to engage in such contravening conduct again."

AustralianSuper CEO Paul Schroder apologized for the matter, stating that the company had addressed the error and compensated affected members. "Multiple member accounts are an industry-wide issue, and for many years, our processes were not comprehensive enough to meet our obligations to members," he said in a statement. "We have now fixed the problem and will continue to review and improve our services so that we provide members with the support and guidance they expect and deserve." AustralianSuper has over 3.5 million members and is responsible for 14.6% of all member accounts nationally.