ASIC puts the $4 trillion super industry on notice after shocking payment delays
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Superannuation is meant to provide financial security, but what happens when the system meant to protect Australians fails them in their most vulnerable moments?
Concerns over delays in critical superannuation payments have sparked legal action, exposing significant issues within the industry.
Now, Australia's largest super fund is at the centre of a major lawsuit, raising questions about how funds handle the benefits owed to grieving families.
Australia’s largest superannuation fund, Australian Super, faced legal action over allegations of significant delays in processing death benefit claims, with the corporate regulator accusing the fund of failing to pay out millions owed to deceased members’ families.
The Australian Securities and Investments Commission (ASIC) alleged that between July 2019 and October 2024, Australian Super did not handle claims ‘efficiently, honestly and fairly’, with some taking anywhere from four months to four years to be assessed.
The regulator claimed that nearly 7,000 death benefit claims were impacted by these delays, with at least 752 members’ benefits not being paid ‘as soon as practicable after the member's death’.
One case reportedly saw a deceased member’s relative waiting over three years for a payout, despite Australian Super having all the necessary information to process the claim.
ASIC deputy chair Sarah Court said: ‘At its heart, this matter is about protecting vulnerable Australians and their families.’
She emphasised the importance of timely payments, stating: ‘Delays are likely to cause further pain and anxiety to people who are already suffering from grief, making what is already a difficult time even harder.’
Australian Super, which manages over $355 billion in retirement savings for nearly 3.5 million members, said it was reviewing ASIC’s claims and would respond in due course.
In a statement, the fund acknowledged the regulator’s focus on the issue, saying it welcomed ‘the regulator’s industry-wide attention on this matter’.
This was not the first time Australian Super had faced regulatory scrutiny.
Previously, the fund agreed to pay a $27 million penalty after failing to merge duplicate member accounts as required by law.
ASIC’s lawsuit formed part of a broader crackdown on superannuation funds delaying death and disability payments.
In 2024, the regulator took legal action against industry super fund Cbus for failing to process more than 10,000 death and disability claims promptly.
Cbus apologised for the delays and committed to compensating affected members.
ASIC warned that the issue extended beyond one or two funds, with all superannuation providers being ‘put on notice’.
‘We think that the delays in payment of death benefits and disability claims in the superannuation sector are significant,’ Ms Court said at the time.
‘We have done…a big, deep surveillance piece in relation to this, we've looked at a whole range of different superannuation funds.
‘We are focusing on this issue very intensively in the coming months.’
The legal action coincided with increasing scrutiny of the $4 trillion superannuation industry.
A Senate inquiry into the sector’s practices delivered a scathing report, calling for reforms to better protect members.
ASIC planned to release a report in the coming weeks detailing its findings on death benefit payment claims across the industry.
ASIC’s crackdown on superannuation funds isn’t limited to just one case.
Another major fund has also faced legal action over similar allegations, raising further concerns about delays in critical payouts.
Watch the full story here.
Source: Youtube/ABC News (Australia)
With Australia’s largest super fund under fire, do you think the industry is doing enough to protect its members? Let us know your thoughts in the comments.
Concerns over delays in critical superannuation payments have sparked legal action, exposing significant issues within the industry.
Now, Australia's largest super fund is at the centre of a major lawsuit, raising questions about how funds handle the benefits owed to grieving families.
Australia’s largest superannuation fund, Australian Super, faced legal action over allegations of significant delays in processing death benefit claims, with the corporate regulator accusing the fund of failing to pay out millions owed to deceased members’ families.
The Australian Securities and Investments Commission (ASIC) alleged that between July 2019 and October 2024, Australian Super did not handle claims ‘efficiently, honestly and fairly’, with some taking anywhere from four months to four years to be assessed.
The regulator claimed that nearly 7,000 death benefit claims were impacted by these delays, with at least 752 members’ benefits not being paid ‘as soon as practicable after the member's death’.
One case reportedly saw a deceased member’s relative waiting over three years for a payout, despite Australian Super having all the necessary information to process the claim.
ASIC deputy chair Sarah Court said: ‘At its heart, this matter is about protecting vulnerable Australians and their families.’
She emphasised the importance of timely payments, stating: ‘Delays are likely to cause further pain and anxiety to people who are already suffering from grief, making what is already a difficult time even harder.’
Australian Super, which manages over $355 billion in retirement savings for nearly 3.5 million members, said it was reviewing ASIC’s claims and would respond in due course.
In a statement, the fund acknowledged the regulator’s focus on the issue, saying it welcomed ‘the regulator’s industry-wide attention on this matter’.
This was not the first time Australian Super had faced regulatory scrutiny.
Previously, the fund agreed to pay a $27 million penalty after failing to merge duplicate member accounts as required by law.
ASIC’s lawsuit formed part of a broader crackdown on superannuation funds delaying death and disability payments.
In 2024, the regulator took legal action against industry super fund Cbus for failing to process more than 10,000 death and disability claims promptly.
Cbus apologised for the delays and committed to compensating affected members.
ASIC warned that the issue extended beyond one or two funds, with all superannuation providers being ‘put on notice’.
‘We think that the delays in payment of death benefits and disability claims in the superannuation sector are significant,’ Ms Court said at the time.
‘We have done…a big, deep surveillance piece in relation to this, we've looked at a whole range of different superannuation funds.
‘We are focusing on this issue very intensively in the coming months.’
The legal action coincided with increasing scrutiny of the $4 trillion superannuation industry.
A Senate inquiry into the sector’s practices delivered a scathing report, calling for reforms to better protect members.
ASIC planned to release a report in the coming weeks detailing its findings on death benefit payment claims across the industry.
ASIC’s crackdown on superannuation funds isn’t limited to just one case.
Another major fund has also faced legal action over similar allegations, raising further concerns about delays in critical payouts.
Watch the full story here.
Source: Youtube/ABC News (Australia)
With Australia’s largest super fund under fire, do you think the industry is doing enough to protect its members? Let us know your thoughts in the comments.
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