Over 48,000 Aussies hit with unexpected fees by AustralianSuper—are you one of them?
- Replies 1
Superannuation funds are meant to safeguard retirement savings, ensuring members get the most out of their contributions.
But what happens when the system designed to protect your future falls short?
A recent legal battle has put one of Australia’s largest super funds under scrutiny, revealing troubling missteps that left thousands of members unknowingly paying the price.
Australia’s largest super fund was fined $27 million for charging duplicate fees to tens of thousands of members.
The Australian Securities and Investments Commission (ASIC) took legal action against AustralianSuper in 2023.
The regulator alleged that the fund failed to merge accounts in the best interests of its members.
As a result, over 48,000 members had their retirement savings eroded by unnecessary duplicate fees.
AustralianSuper and ASIC appeared before the Federal Court in Melbourne on 16 February 2024, where Justice Lisa Hespe ruled against the fund.
The court ordered AustralianSuper to pay a $27 million penalty and cover ASIC’s legal costs of up to $500,000.
ASIC claimed that between 2013 and 2023, about 90,000 members had been affected, with duplicate fees siphoning approximately $69 million from their superannuation.
On average, each impacted member lost around $650 due to AustralianSuper’s negligence.
Although AustralianSuper self-reported the issue and committed to reimbursing affected customers, ASIC proceeded with legal action.
The regulator argued that the fund took three years to acknowledge the problem after becoming aware of it, which it deemed unacceptable.
The breaches, which occurred between 2019 and 2023, violated both the Superannuation Industry Act and the Corporations Act.
Justice Hespe ordered AustralianSuper to publish a prominent notice about the court’s decision on its website and display it on the first screen members see upon logging in.
The ruling specified the size, colour, font, and placement of the notice to ensure visibility.
Neither AustralianSuper nor ASIC’s legal teams made oral submissions in court on the day of the ruling.
ASIC deputy chair Sarah Court previously stated: ‘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.’
When the case was first filed, AustralianSuper admitted fault, stating: ‘AustralianSuper regrets that its processes to identify and combine multiple accounts did not cover all instances of multiple member accounts.’
‘This should not have happened, and we apologise unreservedly to members.’
‘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.’
‘AustralianSuper implemented a member remediation program for this matter.’
The fund managed $341 billion in retirement savings, with one in eight Australian workers entrusting their superannuation to AustralianSuper.
Superannuation mistakes can be costly—make sure you're not losing out with these must-read updates.
With one of Australia’s largest super funds facing hefty penalties for failing its members, do you think this ruling will push other funds to be more transparent?
Let us know your thoughts in the comments.
But what happens when the system designed to protect your future falls short?
A recent legal battle has put one of Australia’s largest super funds under scrutiny, revealing troubling missteps that left thousands of members unknowingly paying the price.
Australia’s largest super fund was fined $27 million for charging duplicate fees to tens of thousands of members.
The Australian Securities and Investments Commission (ASIC) took legal action against AustralianSuper in 2023.
The regulator alleged that the fund failed to merge accounts in the best interests of its members.
As a result, over 48,000 members had their retirement savings eroded by unnecessary duplicate fees.
AustralianSuper and ASIC appeared before the Federal Court in Melbourne on 16 February 2024, where Justice Lisa Hespe ruled against the fund.
The court ordered AustralianSuper to pay a $27 million penalty and cover ASIC’s legal costs of up to $500,000.
ASIC claimed that between 2013 and 2023, about 90,000 members had been affected, with duplicate fees siphoning approximately $69 million from their superannuation.
On average, each impacted member lost around $650 due to AustralianSuper’s negligence.
Although AustralianSuper self-reported the issue and committed to reimbursing affected customers, ASIC proceeded with legal action.
The regulator argued that the fund took three years to acknowledge the problem after becoming aware of it, which it deemed unacceptable.
The breaches, which occurred between 2019 and 2023, violated both the Superannuation Industry Act and the Corporations Act.
Justice Hespe ordered AustralianSuper to publish a prominent notice about the court’s decision on its website and display it on the first screen members see upon logging in.
The ruling specified the size, colour, font, and placement of the notice to ensure visibility.
Neither AustralianSuper nor ASIC’s legal teams made oral submissions in court on the day of the ruling.
ASIC deputy chair Sarah Court previously stated: ‘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.’
When the case was first filed, AustralianSuper admitted fault, stating: ‘AustralianSuper regrets that its processes to identify and combine multiple accounts did not cover all instances of multiple member accounts.’
‘This should not have happened, and we apologise unreservedly to members.’
‘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.’
‘AustralianSuper implemented a member remediation program for this matter.’
The fund managed $341 billion in retirement savings, with one in eight Australian workers entrusting their superannuation to AustralianSuper.
Superannuation mistakes can be costly—make sure you're not losing out with these must-read updates.
- This superannuation blunder can cost you thousands of dollars! What happened?
- Are you overpaying superannuation tax? Find out how many Aussies are missing out on savings
- Maximise your retirement funds with the latest superannuation reforms! Here's what we know so far
- Economist proposes controversial change to superannuation: ‘It’s a really ugly mark’
With one of Australia’s largest super funds facing hefty penalties for failing its members, do you think this ruling will push other funds to be more transparent?
Let us know your thoughts in the comments.
.png){kind=icon}
