Justice Hespe remarked on the fund's systemic failures, highlighting the absence of sufficient system checks to merge multiple accounts in the best interest of members, as mandated by Section 108A of the Superannuation Industry (Supervision) Act 1993. The law stipulates that trustees must identify and consolidate multiple accounts annually. The court's decision underscores a significant oversight and operational failure by AustralianSuper to maintain compliance with these specific legislative requirements.
According to Sarah Court, Deputy Chair of the Australian Securities and Investments Commission (ASIC), the hefty $27 million penalty underscores the gravity of this systemic failure. Court explained that enhancing member services in superannuation funds remains a strategic priority for ASIC, which looks to enforce stringent measures to ensure trustees fulfil their obligations. ASIC initiated legal proceedings in September 2023 after identifying breaches that spanned from July 1, 2013, to March 31, 2023.
Responding to the ruling, AustralianSuper stated it has fully remedied the situation involving its members. The fund reported its non-compliance to ASIC and the Australian Prudential Regulation Authority in December 2021. CEO Paul Schroder expressed regret over the oversight and assured members of the company's expanded efforts to improve processes and prevent future occurrences. Schroder acknowledged the wider industry issue with multiple member accounts and committed to ongoing enhancements in member services.
ASIC's findings align with data from the tax office, which indicated that around 4 million Australians held multiple super accounts as of June 30 of the previous year. This incident with AustralianSuper serves as a reminder of the substantial risks and financial implications associated with poor compliance and administrative inefficiencies in the superannuation sector. Moving forward, stakeholder focus is expected to intensify on enforcing member-centric policies across Australian super funds.
