MELBOURNE: AustralianSuper, the nation’s largest pension fund, faces a A$30 million ($22 million) fine for mishandling death benefit claims after it was sued by the corporate watchdog.
The pension and the Australian Securities and Investments Commission signed a statement of agreed facts, with a suggested A$30 million penalty, according to proceedings in the Federal Court in Melbourne on Wednesday.
ASIC sued the A$410 billion giant last March, alleging it didn’t "efficiently, honestly and fairly” handle almost 7,000 death benefit claims between July 2019 and October 2024. Key to the action was the amount of time AustralianSuper took to process and pay claims to people who had lost a family member and were entitled to their death benefit.
The recommendation also included that AustralianSuper pay ASIC’s costs fixed at A$500,000. The final penalties may yet change and the court overseen by Justice O’Callaghan will need to give a ruling.
The development is the latest sign of the mounting administrative challenges facing the nation’s fast-growing A$4.8 trillion pension industry. Last November, rival fund Cbus was ordered to pay a A$23.5 million fine over failures in handling claims.
Regulators have for years told pension funds to improve customer service. In June, ASIC called out "ongoing weaknesses” in how they deal with claims. Last year, AustralianSuper was ordered to pay a A$27 million penalty in a separate case over failures to merge multiple member accounts.
ASIC is reviewing how superannuation trustees use member complaints data to identify issues and improve services.
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