Australia’s Largest Super Fund Slapped with Hefty Fine

Australia’s biggest super fund, AustralianSuper, has been hit with a massive $27 million fine after failing to merge duplicate accounts for tens of thousands of its members.

The Federal Court ruled that between July 2013 and June 2022, more than 90,000 members had multiple accounts that should have been combined. As a result, they were unknowingly paying extra in administration fees, insurance premiums, and lost investment earnings—adding up to around $69 million in losses.

Justice Lisa Hespe, who made the ruling, didn’t hold back. “It is inexcusable for [AustralianSuper] to not have had processes and systems in place to ensure compliance with a specific legislative requirement,” she said.

The super fund self-reported the issue in 2021 and fully cooperated with regulators. Both AustralianSuper and the Australian Securities and Investments Commission (ASIC) agreed that a $27 million fine was fair, and the judge signed off on it.

Justice Hespe also made it clear that this wasn’t just about punishing AustralianSuper—it was about setting an example. “The penalties in this case need to be large enough to deter other superannuation fund trustees from failing to diligently discharge their duties,” she said.

AustralianSuper CEO Paul Schroder has since apologized, admitting the fund didn’t do enough to merge accounts as required. “We’ve fixed that now,” he said, adding that affected members have been compensated.

With over 3.5 million members and responsibility for nearly 15% of super accounts nationwide, AustralianSuper is a major player in the industry. While they’ve taken steps to fix the problem, this case is a reminder for all super funds to stay on top of their obligations—or risk facing hefty consequences.