ASIC Sues Australian Super for Delayed Death Benefit Payouts

Australia’s biggest superannuation fund, Australian Super, is in hot water with the corporate regulator ASIC over major delays in paying out death benefits to the families of deceased members.

ASIC alleges that between July 2019 and October 2024, Australian Super failed to process claims fairly, efficiently, and honestly, leaving grieving families waiting anywhere from four months to four years for their payouts.

Thousands Affected, Millions Unpaid

According to ASIC, the super fund dragged its feet on nearly 7,000 death benefit claims, and in at least 752 cases, failed to pay out benefits as soon as they should have.

One particularly shocking example? A claim took more than three years to be paid out—despite all the necessary paperwork being in order.

ASIC deputy chair Sarah Court was blunt in her criticism:"At its heart, this matter is about protecting vulnerable Australians and their families. Delays cause unnecessary pain and anxiety at an already difficult time."

Australian Super’s Response & Ongoing Issues

Australian Super, which manages over $355 billion for nearly 3.5 million Australians, has acknowledged ASIC’s lawsuit.In a statement, the fund said it was "considering ASIC's claim carefully and will respond on the substance of the claim in due course."

This isn't the first time the fund has had issues with the regulator. It recently copped a $27 million fine for failing to merge duplicate member accounts, a requirement under superannuation laws.

Super Funds Under the Microscope

Australian Super isn’t alone in facing legal trouble. Last year, ASIC sued Cbus, another major industry super fund, for delaying over 10,000 death and disability claims. Cbus has since apologized and pledged to compensate affected members.

ASIC has put all super funds on notice, warning that slow payouts in the superannuation sector are a major problem.

"We've looked at a whole range of super funds, and we're focusing on this issue very intensively in the coming months," Court said.

What’s Next?

ASIC is expected to release a report soon detailing how widespread these delays are across the $4 trillion superannuation industry.

Meanwhile, a Senate inquiry led by the Coalition earlier this year delivered a scathing review of the sector, calling for urgent reforms to better protect members.

For now, Australian Super members—especially those waiting on death benefit payouts—will be watching closely to see what happens next.