ASIC is suing AustralianSuper Pty Ltd, the trustee of Australia’s largest superannuation fund, over delayed processing of nearly 7,000 death benefit claims, according to proceedings filed in the Federal Court.
ASIC alleges between 1 July 2019 and 18 October 2024, AustralianSuper failed to process death benefit claims efficiently, honestly and fairly when it took between four months and four years from the date the claim form was returned to assess at least 6,897 death benefit claims.
ASIC also alleges AustralianSuper failed to pay member’s benefits as soon as practicable after the member’s death in respect of at least 752 members. In one case, despite having all the information required to pay the benefit, it took AustralianSuper 1,140 days to make the payment; others took 438, 412 and 366 days.
In 254 cases, AustralianSuper took between 15 to 213 days to provide the claim form, according to ASIC’s allegations.
ASIC Deputy Chair, Sarah Court said, ‘At its heart, this matter is about protecting vulnerable Australians and their families.
‘It is vital that death benefit claims are processed in a timely manner. Delays are likely to cause further pain and anxiety to people who are already suffering from grief, making what is already a difficult time even harder.’
Member services failures in the superannuation sector remains an enforcement priority for ASIC.
Last November, ASIC initiated civil penalty proceedings against United Super Pty Ltd, the trustee of Cbus, alleging delays in processing death benefit and total and permanent disability claims affecting more than 10,000 members and claimants.
‘It is the trustee's responsibility to ensure sufficient resources are available to service members and claimants, and that adequate oversight of systems is maintained to deliver all services as promised to members. Accountability cannot be outsourced.
‘Our work on member services will continue with the release of our death benefits report in coming weeks,’ Ms Court said.
ASIC alleges AustralianSuper contravened the following provisions:
- its obligation under s 912A(1)(a) of the Corporations Act (the Act) to do all things necessary to ensure that the financial services covered by its licence are provided efficiently, honestly and fairly, and
- its obligation under s 912A(1)(c) of the Act to comply with the financial services laws on 752 occasions, by failing to pay a member’s benefits as soon as practicable after the members death in respect of 752 members (as required by s 34(1) of the Superannuation Industry (Supervision) Act and regulation 6.21(1) of the Superannuation Industry (Supervision) Regulations).
ASIC is seeking penalties, declarations, an adverse publicity order and orders for compliance matters to be implemented.
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Background
AustralianSuper is the trustee of the largest superannuation fund in Australia and manages over $355 billion of retirement savings on behalf of over 3.49 million members (according to APRA as at 30 September 2024).
AustralianSuper was responsible for nearly a quarter of all complaints to the Australian Financial Complaints Authority (AFCA) about death benefits in 2022/23 and 2023/24. From 2021 to 2023, AFCA complaints about service-related issues relating to superannuation products roughly doubled.
On 21 February 2025, the Federal Court of Australia ordered that AustralianSuper pay a pecuniary penalty of $27 million in respect of failures to merge multiple member accounts (25-017MR).
ASIC’s Moneysmart website has information for consumers to help make decisions about their insurance at moneysmart.gov.au.