AustralianSuper hit with $27m fine
The Federal Court has handed Australia’s biggest industry super fund, AustralianSuper, a $27 million fine for its failure to inform members of duplicate accounts.
Federal Court Justice Lisa Hespe labelled the compliance breach – prosecuted by regulator ASIC – as “serious and highly concerning”.
The Court found the super provider had, for several years, failed to promptly identify and merge thousands of members identified as having multiple accounts – a requirement under the Superannuation Industry (Supervision) Act 1993 (SIS Act).
Additionally, Justice Hespe wrote in her judgement, AusSuper “did not exercise, in relation to the interests of that beneficiary, the same degree of care, skill and diligence as a prudent superannuation trustee would have exercised” as required under the SIS Act.
More than 42,000 AusSuper account holders were affected between 2019 and 2023, the Court found.
“AustralianSuper is Australia’s largest industry superannuation fund,” Justice Hespe said in her judgment.
“It is inexcusable for it to not have had processes and systems in place to ensure compliance with a specific legislative requirement.”
She added: “Its systems also failed to ensure that repeated human errors in relation to the failure to merge the multiple accounts were prevented or promptly identified and corrected.”
“Failures of this kind involving a failure to have processes and procedures in place to make individuals responsible and accountable for ensuring regulatory obligations are complied with warrant substantial penalties.
“A failure to put in place systems and processes to ensure duties are performed efficiently, honestly and fairly and that trustees act in the best financial interests of the members cannot be regarded as a commercially acceptable option.”
AustralianSuper’s chief executive Paul Schroder expressed regret for the breach, admitting that the super fund’s process “wasn’t comprehensive enough”. He added that the company has since compensated affected members.
“Multiple member accounts are a problem across our industry and for several years our process wasn’t comprehensive enough to meet our obligations to members,” Schroder said in a statement.
“We’ve fixed that now and we continue to review and improve our services, so we provide members with the support and guidance they expect and deserve.”
In addition to the $27 million fine, the Court has ordered AustralianSuper to pay ASIC’s costs up to $500,000.
So, do the members pay this Fine as members of this Not for Profit Fund?
Does this come out of all members accounts as an ASIC Fine Fee?
Or a reduction in Performance?
Would be interested in how this works?
non-disclosed to members in any way they would understand, as it will be paid via an investment reserve set aside form a portion of members earnings. So the members pay.
Trustees responsible held to account ? of course not
Trustees pay any financial fines or suffer any financial pain ? of course not
Members who had double accounts, helped pay their own compensations.
Members who had double accounts, helped pay the ASIC Fine.
Members who had double accounts, helped pay ASIC’s and Australian Supers legal fees.
And members blindly have no idea of any of this.
…which will come straight from the members, via the ‘pecuniary penalty reserves’ that were allowed to be put in place by a corrupt regulator and Labor government to protect the union run superfunds.
Such a farce until accountability and responsibility rests with those at fault.
The question is – did any of Australian Super’s staff who were aware of these infractions suffer any form of penalty, bonuses withdrawn, demoted or sacked. So now Australian Super members have to pay $27m + $500,000 in ASIC court costs (not offset against our Adviser ASIC levy of course) + their own lawyers fees and court costs, so lets say another $1m+. So Australian Super members charged the best part of $30m (to a reserve of course set up for this purpose)
So the members were charged duplicate fees, then members paid to compensate themselves and now members will be made to pay the fine and ASICs costs. Great system. Any change any executives lost their job over this? Didn’t think so.
Who pays the fine? The members?