AustralianSuper faces lawsuit over failure to address duplicate accounts, costing members $69M
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The Australian Securities and Investments Commission (ASIC) is taking legal action against AustralianSuper, the country's largest super fund, for failing to identify and merge duplicate accounts belonging to approximately 90,000 members.
This oversight resulted in these members being charged multiple fees and insurance premiums.
On Friday, ASIC Deputy Chair Sarah Court announced that the regulator had initiated civil penalty proceedings against the trustee of AustralianSuper due to issues that led to members being overcharged a total of $69 million.
ASIC alleged that for nearly a decade, the super fund did not implement adequate policies and procedures to identify members who held multiple AustralianSuper accounts and to consolidate those accounts when such consolidation would have been in the best interests of the members.
Ms Court warned that neglecting to consolidate multiple accounts could result in 'significant financial consequences' and gradually diminish a person's superannuation balance.
She said: '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.'
'We expect these issues to be identified and rectified quickly, including compensating members if a trustee has failed to comply with its obligations.'
ASIC said that AustralianSuper was allegedly aware in 2018 of the number of duplicate accounts within the fund and possible gaps in its policies and procedures but did not take adequate steps to investigate and resolve the issue until late 2021 and early 2022.
They also mentioned that as of June 2022, about 3 million Australian consumers still had unintentional multiple accounts. Around half a million people had two or more accounts in the same fund.
The corporate watchdog seeks declarations, pecuniary penalties, and other legal orders against the super fund. The specific date for the initial court hearing for this case has not been scheduled yet.
A spokesperson from AustralianSuper has responded to the issue, expressing regret that their procedures for detecting and consolidating duplicate accounts were not able to address every case of members having multiple accounts.
'This should not have happened, and we apologise unreservedly to members,' the spokesperson said.
'AustralianSuper self-reported this issue and has fully cooperated with ASIC and APRA on this matter and, separately, with ASIC for its 2022 industry review of the management of multiple member accounts.'
This news comes after it was reported in May that AustralianSuper mistakenly double-charged members with more than one fund account. The super fund set aside $70 million to repay about 100,000 members an average of $650.
Members, it's always a good idea to check your super accounts to make sure your money is where it should be and that you're not paying too much in fees or premiums.
If you think you might have multiple accounts or are feeling concerned about your user experience with any of your superannuation funds, call the customer service number and ask to speak to a representative.
What are your thoughts on this news? Do you have funds in AustralianSuper? Let us know in the comments below.
This oversight resulted in these members being charged multiple fees and insurance premiums.
On Friday, ASIC Deputy Chair Sarah Court announced that the regulator had initiated civil penalty proceedings against the trustee of AustralianSuper due to issues that led to members being overcharged a total of $69 million.
ASIC alleged that for nearly a decade, the super fund did not implement adequate policies and procedures to identify members who held multiple AustralianSuper accounts and to consolidate those accounts when such consolidation would have been in the best interests of the members.
ASIC Deputy Chair Sarah Court said the failure to merge duplicate accounts eroded members' superannuation balances over time. Credit: AustralianSuper.
Ms Court warned that neglecting to consolidate multiple accounts could result in 'significant financial consequences' and gradually diminish a person's superannuation balance.
She said: '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.'
'We expect these issues to be identified and rectified quickly, including compensating members if a trustee has failed to comply with its obligations.'
ASIC said that AustralianSuper was allegedly aware in 2018 of the number of duplicate accounts within the fund and possible gaps in its policies and procedures but did not take adequate steps to investigate and resolve the issue until late 2021 and early 2022.
They also mentioned that as of June 2022, about 3 million Australian consumers still had unintentional multiple accounts. Around half a million people had two or more accounts in the same fund.
The corporate watchdog seeks declarations, pecuniary penalties, and other legal orders against the super fund. The specific date for the initial court hearing for this case has not been scheduled yet.
A spokesperson from AustralianSuper has responded to the issue, expressing regret that their procedures for detecting and consolidating duplicate accounts were not able to address every case of members having multiple accounts.
'This should not have happened, and we apologise unreservedly to members,' the spokesperson said.
'AustralianSuper self-reported this issue and has fully cooperated with ASIC and APRA on this matter and, separately, with ASIC for its 2022 industry review of the management of multiple member accounts.'
This news comes after it was reported in May that AustralianSuper mistakenly double-charged members with more than one fund account. The super fund set aside $70 million to repay about 100,000 members an average of $650.
Members, it's always a good idea to check your super accounts to make sure your money is where it should be and that you're not paying too much in fees or premiums.
If you think you might have multiple accounts or are feeling concerned about your user experience with any of your superannuation funds, call the customer service number and ask to speak to a representative.
What are your thoughts on this news? Do you have funds in AustralianSuper? Let us know in the comments below.
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