AustralianSuper Fined $27 Million for Overcharging Members
Alright, let’s talk about the massive fine that just hit AustralianSuper, the country’s largest superannuation fund. This is big news—$27 million in penalties after the Federal Court ruled that AustralianSuper overcharged tens of thousands of its members a total of $69 million over nearly a decade.
So, what happened? Well, it turns out AustralianSuper knew as far back as 2013 that many of its members had duplicate accounts, but they failed to merge them. This meant members were getting charged unnecessary fees, multiple insurance premiums, and losing out on investment earnings. In total, about 90,000 people were affected between July 2013 and March 2023. That’s a lot of people losing money they shouldn’t have.
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Now, here’s the kicker—an internal email from 2015 shows that an AustralianSuper manager actually acknowledged that merging these accounts would benefit the members but would mean less revenue for the fund. So, they didn’t prioritize fixing the issue. And it took them years to even escalate the problem to senior executives.
It wasn’t until late 2021, after regulators stepped in, that AustralianSuper really took action. The Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) launched an investigation and took the fund to court in 2023. The court found that AustralianSuper had “systemic deficiencies” and had failed to act in the best interests of its members.
Now, since AustralianSuper is a not-for-profit fund, you might be wondering—who’s actually paying this fine? Well, technically, the fund has already set aside money for it in its 2023-24 accounts, so they’re saying member fees won’t increase to cover the penalty. But still, it’s frustrating to see that members were the ones who suffered in the first place.
AustralianSuper’s CEO, Paul Schroder, has since apologized, saying they’ve fixed the issue, compensated affected members, and improved their processes to prevent it from happening again. But ASIC’s deputy chair, Sarah Court, made it clear that this penalty is meant to send a strong message—super funds must act in their members’ best interests, and failures like this won’t be taken lightly.
This whole situation is a reminder to regularly check your super accounts. If you’ve got multiple accounts, consolidating them could save you money in the long run. Let’s hope this fine pushes the industry to do better.
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