By Roushni Nair
The Australian securities regulator said on Friday it initiated a lawsuit against the trustee of AustralianSuper, citing the country's largest superannuation fund failed to have adequate policies to identify members who held multiple accounts.
The Australian Securities and Investments Commission (ASIC) started civil penalty proceedings alleging that AustralianSuper did not have substantial procedures for almost 10 years to help merge multiple accounts of a single member.
"Failing to merge duplicate accounts within a fund can have significant financial consequences for members who end up paying multiple sets of fees, eroding their superannuation balance over time," ASIC Deputy Chair Sarah Court said in a statement.
AustralianSuper has more than 2.87 million members and A$258 billion ($164.48 billion) in member assets, as of June 30, 2022, according to the ASIC.
"While this poses significant challenges for the entire super fund industry, it also serves as a wake-up call for all the super fund holders to protect their retirement wealth with extra diligence and regular check," said Hebe Chen, an analyst with IG Markets.
Between July 1, 2013, and March 31, 2023, about 90,000 AustralianSuper members were affected, with a total cost to members of about A$69 million, ASIC said, adding that AustralianSuper was allegedly aware in 2018 of the number of multiple member accounts and the shortfall in its policies and procedures.
"AustralianSuper regrets that its processes to identify and combine multiple accounts did not cover all instances of multiple member accounts. This should not have happened, and we apologise unreservedly to members," an AustralianSuper spokesperson told Reuters.
AustralianSuper, which self-reported the issue to ASIC, said a member remediation programme launched for this matter earlier this year is now "substantially" complete.
As of June 2022, three million people had multiple superannuation accounts in Australia, ASIC stated, adding that a significant proportion of these multiple accounts were held within the same fund.
($1 = 1.5686 Australian dollars)
(Reporting by Roushni Nair in Bengaluru; Editing by Devika Syamnath and Sherry Jacob-Phillips)