AustralianSuper, the nation’s largest super fund, is a profit-for-member fund boasting several awards as a trusted brand. As of December 2024, it manages over $365 billion of retirement savings for its over 3.5 million members.
However, it has been recently slapped with a staggering $27 million fine after the Australian Securities and Investments Commission (ASIC) took legal action against the fund. Let’s delve into the reason for this penalty and its impact on the members.
The case, which culminated in a Federal Court hearing in Melbourne, revealed that over 48,000 members’ accounts were improperly managed, resulting in the failure to merge accounts in the members’ best interests.
This oversight reportedly led to tens of thousands of AustralianSuper customers being charged fees multiple times equating to $650 each, slowly chipping away at their hard-earned retirement savings.
The decision to fine AustralineSuper underscores the severity of the fund’s misstep and serves as a cautionary tale for other superannuation funds to prioritise their members’ interests.
Justice Lisa Hespe, presiding over the case, did not mince words when handing down her decision on Friday. In addition to the $27 million fine, she ordered AustralianSuper to cover ASIC’s legal costs, which could amount to as much as $500,000.
Meanwhile, in a statement after the hearing, Paul Schroder, chief executive of AustralianSuper, left their members with an assurance, ‘We found this mistake, we reported it, we apologised to impacted members, we compensated them, and we’ve improved our processes to prevent this happening again.’
He continued, ‘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. 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.’
Moving forward, as a super fund member, it’s crucial to review your account statements and look for any signs of duplicate charges. While the fund is expected to reach out to affected members, it’s always wise to be proactive in matters concerning your financial future.
Should you discover any discrepancies, contact your super immediately to discuss the steps they are taking to rectify the situation and to ensure you are properly compensated.
It’s not uncommon for members to overlook the details in their statements, but as this case shows, vigilance can be the difference between a secure retirement and one plagued by financial setbacks.
At YourLifeChoices, we understand that navigating the complexities of superannuation can be daunting. That’s why we’re committed to providing you with the latest information and guidance to help you make informed decisions about your retirement savings.
We encourage you, our readers, to share your experiences and tips for managing super accounts in the comments below. Your insights could be invaluable to fellow readers looking to safeguard their future.
Also read: $51 million in unclaimed super: Check if you’re owed a share!
But who ultimately pays the fine? It comes out of profits, surely, which means ultimately the members suffer the loss. I doubt the management will be paying $27 million out of their personal pay packets or bank accounts?
My thoughts too! Just who gets the $27M ? No doubt it flops into some government account and the funds members are simply $27m worse of in their super! Better to sack the funds board or management that allowed it to happen!!
Where is the accountability!
The board will simply take $27M out of profits & members will earn less.
In fact members will pay the fine for money they were shortchanged in the first place – double whammy! Company policy comes from the top down – these guys should lose their jobs.
This is a good decision. I have read many of the comments and the writers have posed the question about who pays.
It’s a good outcome, because it sends a strong message to the industry as a whole. Superannuation is a large industry with billions of dollars. There are retail funds, industry funds and self managed funds. It sends a message to all about their responsibilities. Retail funds are run for profit, a fine like this sends a warning that others could be hit by fines too, for non compliance.
Directors of companies are put on notice.
Executives are put on notice.
Many of those people, have incentive payments tied to profit or growth outcomes. Fines like this threaten these.
Fines like this often go to ASIC, the ACCC which helps them in their roles. The regulators are often under funded, the fines help fund future compliance.