The Australian Securities and Investments Commission (ASIC) announced that it has filed a lawsuit against AustralianSuper, Australia's largest pension fund company, for failing to adopt appropriate policies to identify members with multiple accounts.
ASIC has initiated civil penalty proceedings, claiming that AustralianSuper has not adequately developed rules to assist in consolidating multiple accounts of individual members over nearly 10 years.
ASIC Deputy Chair Sarah Court stated in a declaration that failure to consolidate duplicate accounts within the fund could have significant financial consequences for members, meaning they end up paying multiple sets of fees, gradually eroding their pension balances.
According to ASIC's data, as of June 30, 2022, AustralianSuper had over 2,870,000 members and AUD 258 billion (approximately USD 164.48 billion) in assets.
IG Markets analyst Hebe Chen noted that while ASIC's decision poses a significant challenge to the entire pension fund industry, it also serves as a reminder for all pension fund holders to be extra cautious and check regularly to protect their retirement funds.
ASIC stated that around 90,000 AustralianSuper members were affected between July 1, 2013, and March 31, 2023, involving a total cost of about AUD 69 million. ASIC added that there is information indicating AustralianSuper had identified the issue of multiple accounts and the deficiencies in its policies and procedures as early as 2018.
A spokesperson for AustralianSuper told Reuters that the company regrets not having fully covered the identification and consolidation process for all multiple member accounts and stated that a member remediation program initiated earlier has been "largely completed."
As of June 2022, there were 3 million people in Australia with multiple pension accounts. ASIC pointed out that a significant proportion of these multiple accounts were opened within the same pension fund.
