Cbus hit with $23.5m penalty

Big building and construction industry superannuation fund, Cbus has been hit with a $23.5 million Federal Court penalty for unreasonable delays paying death benefits to thousands of members.

The Australian Securities and Investments Commission (ASIC) initiated the action and said the penalty had been imposed against United Super Pty Ltd, the trustee of the Construction and Building Unions Superannuation Fund (Cbus), following admissions by Cbus that serious failures caused delays in processing death benefits and total and permanent disability (TPD) insurance claims and impacted more than 7,000 Australians in distressing situations.

The penalty exceeds the $18.5m in revenue United Super declared in the 2024 financial year.

The penalties come on top of Cbus’s own remediation program to pay approximately $32 million in compensation to the estimated 7,402 affected claimants and members for lost earnings and wrongfully charged fees.

ASIC Deputy Chair Sarah Court said Cbus’s failures needlessly exacerbated the distress of people who were already in upsetting situations.

“Thousands of Australians suffered real and avoidable harm because of long delays and systemic failures in the way Cbus handled important and sensitive insurance claims,” Court said.

“When people were grieving the loss of a loved one or grappling with a life-altering injury, Cbus should have ensured timely and accurate decisions were made on their insurance claims.”

“Not only was Cbus aware of increased insurance claim volumes, but it was also put on notice by its own customers who were complaining about the long delays they were enduring.”