Even the Dead Pay Fees: Why Aussie Seniors Should Keep a Close Eye on Their Super

Imagine this: you work hard all your life, diligently contribute to your superannuation nest egg, and hope that when the time comes, your super fund will take care of you and your loved ones.

Now imagine finding out that even after you’ve passed away, your super fund might still be nibbling away at your money. It sounds absurd – almost like the start of a bad joke – but it’s exactly what’s been happening, according to shocking revelations from Australia’s financial watchdog.

In a recent case that has Aussie retirees shaking their heads, one of Australia’s largest super funds was caught charging fees to members who were no longer alive. Yes, you read that right – the fees kept coming, even after the customer had literally stopped breathing.



This isn’t some dark comedy or an urban myth from your local RSL club. This is real life, real money, and real families affected. The Australian Securities and Investments Commission (ASIC) has just launched legal action against Mercer Super, accusing it of “longstanding and systemic failure” to comply with the law.

Among Mercer’s alleged sins: failing to report serious issues like insurance premiums not being refunded after members had died. In other words, people’s accounts were still being charged for insurance after they were gone. If that doesn’t make you sit up in your armchair, what will?


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Image source: 7NEWS Australia / Youtube.


Super Scandals: Not the First Rodeo​

Before you dismiss this Mercer fiasco as a one-off fluke, let’s get one thing straight – it’s not the first time something like this has happened. Far from it. In fact, Australia’s superannuation industry has had a few skeletons (pun intended) in its closet for years. Charging fees to dead customers? Sadly, that’s an encore of an old tune. You might recall the headlines a few years back when AMP was fined a hefty $24 million for billing over 2,000 deceased clients for insurance and financial advice.

That saga, which stemmed from the 2018 Banking Royal Commission revelations, was described by regulators as a “fundamental breach of trust”. As ASIC Deputy Chair Sarah Court put it, “Customers, and their beneficiaries, expect ... once notified, deceased customers are no longer charged. These systems were inadequate, and customers were let down.”

AMP wasn’t alone in its misconduct, and Mercer isn’t either. Multiple major funds have been caught out treating their members (and their late members’ families) poorly. In just the past year, ASIC has sued AustralianSuper (the country’s largest super fund) and Cbus (the big construction industry fund) for failures in handling death benefit and insurance claims. What kind of failures are we talking about? In plain English: taking way too long to pay out people’s entitlements, giving grieving families the runaround, and generally dropping the ball when it mattered most.

One damning report by ASIC earlier this year revealed case after case of heartache – including an instance where a widow waited over 500 days (that’s well over a year!) to get her husband’s super payout while drowning in bills and grief. Imagine having to chase a six-figure death benefit for more than a year, making desperate phone calls and wading through endless paperwork, all while mourning the person you lost. As ASIC’s review bluntly noted, these delays and lapses caused “deep grief, vulnerability, frustration and genuine suffering” for families.

It’s little wonder ASIC’s Joe Longo, the top cop for finance, gave the industry an absolute blasting. “At the heart of this issue is leadership that doesn’t have a grip on the fund’s data, systems and processes – and ultimately it is the customers who suffer for it,” Longo lamented. In other words, the people running these funds haven’t been on top of their game, and everyday Australians are paying the price for it.



Why It Matters to Retirees​

Now, if you’re an Australian senior or about to be one (lucky you!), you might be thinking: “Alright, a few big funds messed up. But I’m just a regular retiree – why does this matter to me?” Well, it matters because it’s your money, and your golden years on the line. Superannuation isn’t some abstract pile of cash in a vault; it’s the groceries you buy, the electricity bill you pay, the occasional holiday you take, and the legacy you leave for your family. For many older Aussies, super is the lifeline that supports their retirement alongside (or instead of) the Age Pension.

The superannuation pool in Australia is enormous – over $4 trillion in assets as of the end of 2024 – and it exists for one reason: to look after us in old age. With that much of Australians’ wealth in play, we absolutely need to trust that these funds are doing the right thing.


But trust, as they say, must be earned. And when we keep seeing headlines about super funds charging fees to the deceased, or dragging their feet on payouts, that trust cracks like a dropped porcelain teacup. Retirees, especially, are vulnerable if their super funds behave badly. Unlike younger workers, seniors don’t have decades ahead to make up for any lost money or fix errors.


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Image source: Seniors Discount Club.


If your fund overcharges you, or doesn’t promptly pay out your spouse’s benefit, the impact is immediate and personal. It can mean the difference between affording quality aged care or not, between paying off the remainder of a mortgage or leaving debt behind. As one frustrated beneficiary in a delayed payout case put it, “the process should just be quicker, especially in relation to death… it should be seamless”abc.net.au. She had endured months of tearful, nerve-wracking delays from her late brother’s super fund – a situation no grieving family should have to go through.

Another reason to care: if it can happen to big funds, it can happen to any fund. Mercer Super, the one in ASIC’s crosshairs now, is the seventh largest fund in the nation, managing about $70 billion for 950,000 members. AustralianSuper, which got sued for slow death claims, manages over $340 billion for more than 3 million people.

These are not tiny operations running out of a suburban office – they are the giants of the industry. So if even the giants can stumble (or behave badly), we have to ask: how are the smaller or lesser-known funds doing? It’s a bit like hearing that the best hospital in town occasionally forgets a patient in the waiting room – it makes you worry about all the others.



Keeping the Bastards Honest – Your Money, Your Voice​

There’s an old saying in Australian politics about “keeping the bastards honest.” While super funds aren’t politicians, the same spirit applies here. Aussies, especially seniors, have every right – and perhaps a duty to themselves – to be critical of their superannuation providers. That doesn’t mean cynically believing every fund is out to swindle you. It means staying alert, asking questions, and expecting high standards. After all, you are the customer, and these funds are your custodians.

As ASIC’s Sarah Court emphasized in the Mercer case, customers “expect their super funds to abide by the law” (a pretty low bar, one would think!). When they don’t, it’s up to regulators to pounce – and up to us to hold these institutions accountable by shining a light on their actions.

So what can you do, practically speaking? Start by taking an active interest in your super account. Many of us tend to “set and forget” our super, especially once we hit retirement and start drawing it down. But glancing over your statements, knowing what fees you’re paying, and understanding your insurance cover (if you have any through super) is important.


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Image source: 7NEWS Australia / Youtube.


Make sure your fund has up-to-date contact details for you and your beneficiaries. And it might sound morbid, but it’s worth checking what your fund’s process is for handling death benefits – do they have your nominated beneficiary? Do they claim to pay quickly? Given the horror stories, you want to be sure your spouse or kids won’t be stuck waiting 500 days for money that’s rightfully theirs.

Don’t be afraid to ask questions of your fund. If a news story breaks about a blunder (like Mercer’s, or any other), you could contact your fund and ask, “What are you doing to ensure this doesn’t happen to us members?” It sends a message that you’re paying attention. Funds that know their members are engaged are more likely to lift their game. Also, remember you have options.

The superannuation market is competitive – if you truly lose faith in how your fund operates, you can switch to another fund. Naturally, you’d weigh things like fees, performance, and services carefully (and perhaps consult a financial adviser), but the point is, you’re not chained for life to any one super fund. They have to earn your business, continuously.



Finally, it’s encouraging to know that ASIC is on the case – the regulator has made superannuation member services one of its top priorities for 2025. In plain terms, that means they’re actively looking for super funds that are mistreating members (whether alive or passed on) and whacking them with lawsuits or fines. This is good news for all of us because sunlight is the best disinfectant.

Every time a scandal comes to light, it forces the whole industry to take a good hard look in the mirror. Mercer’s legal troubles send a loud message to every other fund CEO: “If you’re sweeping problems under the rug, cut it out now, or you’ll be next.”

Still, regulators can’t catch everything, and often they act after damage is done. The first line of defence is a savvy, vocal membership. For too long, superannuation was seen as a set-and-forget government-mandated program.

But as retirees, we know it’s our money and our future. We have more tools than ever – from comparison websites to annual fund report cards – to judge if our fund is doing right by us. And as a community, Aussie seniors carry a lot of weight (ballot box, anyone?). If enough of us demand better, the suits in charge will listen.


Source: 7NEWS Australia / Youtube.​


At the end of the day, superannuation is supposed to make our lives easier and more secure in retirement, not harder. We shouldn’t have to double-check that we’re not being charged from beyond the grave, or wonder if our spouse will get the run-around in the event of a tragedy. We’ve earned the right to peace of mind.

So let’s enjoy those golden years – but with one eye on the statements and a healthy dose of skepticism. After all, it’s your money – make sure it’s working for you, not vanishing in a puff of smoke (or outrageous fees).

Key Takeaways
  • Shocking Case – Mercer Super Charging the Dead: ASIC is suing Mercer, one of Australia’s largest super funds, alleging it failed to report serious issues – including charging insurance premiums to deceased members’ accounts. This highlights a stunning lapse in basic duty to customers.
  • Part of a Broader Pattern: The Mercer scandal isn’t isolated. In the past year, AustralianSuper and Cbus were also sued by ASIC for inordinately delaying death benefit payouts to families. A few years ago, AMP copped a $24 million fine for charging over 2,000 dead clients – a breach of trust that regulators called “very serious, wrongful behaviour”
  • Why Seniors Should Care: Superannuation is the cornerstone of retirement for many Aussies, with the total super pool now around $4.2 trillion. When funds mismanage money or bungle payments, it’s retirees and their families who suffer – from lost dollars to drawn-out stress. Seniors can’t afford to be complacent; these incidents show that even reputable funds can slip up.
  • Be Vigilant and Demanding: Australians (especially older members) are urged to stay vigilant about their super. Check your statements, know your fees and nominations, and don’t hesitate to question your fund’s practices. It’s your money and your future – holding super funds accountable is key to ensuring they truly work in your best interest.

Has your super fund earned your trust for the long haul, or is it time to start asking tougher questions about where your money goes?
 
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