AustralianSuper in 100,000 member remediation
Major superannuation fund, AustralianSuper, has held its hand up to having to remediate around 100,000 members over multiple accounts.
The fund reported today that the cost of the remediation is expected to be around $70 million, with the average payment being $650 per impacted member.
Announcing the move, AustralianSuper said the problem had been identified as part of a review process with respect to multiple accounts held by members.
“The fund regulatory identifies and combines multiple accounts held by a single member to help those members avoid extra fees,” the fund said. “Following our review, we identified that our processes did not cover all instances of multiple member accounts. This should not have happened and we apologise unreservedly to members.”
Those in glass houses….
Royal Commission into Industry Funds?
Not the only fund guilty of this. Now refund all those members who have paid insurance premiums for policies which couldn’t be claimed on.
They will simply take the $70 million from members funds robbing members for their ineptitude.
That is how you top up a General Reserve account.
How do Financial Advisers and Retail Funds pay clients and members for their ineptitude?
How do Fund Managers pay members for their (constant and disastrous) ineptitude? Oh that’s right, they don’t. Ever.
Jim Bob…how do they pay ? Royal Commission, Adviser Suicides, FASEA, massive amounts of Funds changing hands. You’ve obviously been having a vacation on Mars for the last 4 years. As for these inept, corrupt, conflicted, broken funds paying… they don’t.
Where does the $70 million come from to make these payments?
The AustralianSuper Pty Ltd Trustee company had Total Equity of $22m on 30 June 2022.
So where is the $70m coming from?
Let me guess, the members will pay for their own remediation.
You can’t have a profit for members fund without the risk of losses to members too.
Unless they clawed money back from the union officials and union controlled businesses that union super funds give money to?
What an idiotic post
I guess they’ll just use some creative accounting to hide the impacts of the $70m they need to pay. I assume they’ll just build it into the unlisted assets valuations.
Also, where is ASIC? They are very quick to jump on to any retail fund, but with Australian super it seems fine. Conflict of interest ASIC using Aus Super as their employer super provider? Hrmmm.
ASIC: “Before we impose a penalty, let us just take our investments out of there so we don’t suffer a loss!!”
Quick ASIC bust out the wet lettuce leaf again for the faintest tap on AustralianSuper Trustees hands.
Naughty Industry Super Trustees, please ensure ASIC get at least 2 more invites to 5 star dinners, drinks and sporting events to ensure this one is also swept under the ASIC regulatory carpet.
No fines, No bannings, No heads on sticks and indeed NO “Why not prosecute”, that stuff is for Advisers only. : – )
ASIC & Industry Super = Regulatory Capture Corruption at its worst.
It wouldn’t take any creative accounting. The money would come from their Operational Risk Reserve which all funds have and is precisely designed for remediating this sort of error. Of course the ORR is funded by members so ultimately it is the members who would pay (they have to, it’s a non-profit fund).
Note that what’s happened here is that members have had multiple accounts, meaning Aussie Super have doubled up on fees which would have gone to their reserves. So now that over deduction can be paid back to those members. Not a great look for Aussie, but not as bad or as conniving as some of these posts would suggest. They made a mistake, held up their hands to it, and are fixing it. (no I don’t work for Aussie Super, just want to provide some balance to the conversation)
How about some balance to your comment. If this was a retail fund ASIC would not be silent, they would be looking for heads on sticks. Advisers had to do a ten year look back. Retails funds have full ASIC investigations and copped significant fines. Licences have had ASIC sitting in their offices for years. So to say Australian Super can put their hand up and say sorry and that’s not going to cut it. They need to be accountable and be punished they way everyone else in the industry does. That’s the point of all these comments, their response isn’t balanced. ASIC chases heads on sticks for everyone except their union fund buddies, even when 100,000 members have been ripped off by $65 million.
No problem with holding funds accountable – just pointing out that, contrary to the comments above, there is a standard way to fund such errors which is from the ORR, and that the funding would come from the the over-deducted fees sitting in the reserves.
ASIC have in the past fined industry funds as well, so your comments aren’t correct.
Finally, if ASIC does fine Aussie, who will pay? The members, since it’s a not-for-profit fund. How is that good for the members?? Whereas at least a retail fund can pay out of their profits.
So who is accountable then? Basically what you are saying is union funds can do whatever they like and they can’t be fined because of their structure? So why should shareholders of retail funds feel the pain of a fine but members of a union fund shouldn’t? Why aren’t senior executives of Australian Super being named, shamed and banned from the industry? Get it yet? It’s not a conspiracy, it’s corruption.
Curruption: dishonest or fraudulent conduct by those in power, typically involving bribery.
Do you have any evidence this is corruption? (incompentence, yes; corruption not as far as I can see)
As I said before, I have no problem with industry funds being held accountable – and yes that means the Directors and Senior Execs. But the whole thread above assumes this was some sort of intentional attempt to overcharge and I just don’t think that’s the case. This is not a lot of money for a fund the size of Aussie Super, they would have zero incentive to purposefully overcharge members. My call out is not that industry funds shouldn’t be held to account, but that you’re claiming corruption etc with no evidence whatsoever.
A month ago, I submitted an Authority to Enquire (signed, of course, by the member) to Australian Super. They have been “processing” the request for a month, and yesterday told me they required a certificed copy of MY ID.
Australian Super is out of control.
Any adviser or Retail Super fund, or even any business, would be hung, drawn and quartered. Time after time they get away with it. So many times they breach normal Australian consumer laws and no repercussions. I am so sick of how corrupt this system is. It’s very clear that Australian Public Servants are Corrupt and on the payroll of large Union back Super funds. The relationship between Politicians, Public Servants and these corrupt and broken Super funds in any other country would not be tolerated. Why is it tolerated here in Australia ? Australians are being ripped off in order to protect that Golden honey pot called super.
We’ve all done this dance before… We all know how it will go. You’ll soon be able to buy AustralianSuper private debt. Cough Cough take the money out of reserves yeah right.. hilarious. Next year they’ll be able to employ “Advisers” to get even more FUM to invest in that corporate debt and cover for any lost revenue, top up those reserves. Within three years, (once we’ve forgotten about this) they’ll just write off that corporate debt anyway…The “small & temporary negative return” created by the write off, will be washed away with some creative valuations, or lack of it. Some creative accounting & the use of related entities used to raise the private debt. A ponzi scheme, of course not. The staff within ASIC mysteriously turn up with significant payrises in year 3 working for AustralianSuper with a BMW and a parking spot. Too big to fail..In this case. Too much to lose. Anyone who asks questions, (that’s Financial Advisers) get sent to jail for a spelling mistake in their FDS. Confidence in the system is maintained.