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Property InvestmentThe Australian Securities and Investments Commission (ASIC) has taken legal action against Australian Super, the country’s largest superannuation fund, for allegedly causing significant delays in processing death benefit claims for thousands of members. ASIC claims that between July 2019 and October 2024, Australian Super failed to handle nearly 7,000 death benefit claims promptly and fairly, taking up to four years to assess them. Additionally, the fund allegedly did not pay out benefits promptly to at least 752 members after their deaths.
This lawsuit follows ASIC’s previous legal action against Cbus, another industry super fund, for similar delays in processing death and disability payments. The corporate regulator emphasizes the importance of timely processing of death benefit claims, highlighting the additional distress and hardship that delays can cause to grieving families.
Australian Super, managing over $355 billion in retirement savings for around 3.5 million members, has faced regulatory scrutiny in the past. The fund previously incurred a $27 million fine for failing to consolidate duplicate member accounts as required by law. In response to the current lawsuit, Australian Super stated that it is carefully considering ASIC’s claims and will provide a substantive response in due course. The fund also expressed appreciation for the regulator’s broader focus on industry-wide issues regarding benefit payments.
ASIC’s crackdown on delays in death and disability benefit payments is part of a broader effort to ensure compliance within the superannuation sector. The regulator’s recent actions indicate a heightened vigilance toward addressing systemic issues that impact members’ access to their entitlements in a timely manner.
In light of these developments, the superannuation industry, which plays a crucial role in Australians’ retirement savings, is facing increased scrutiny and calls for reform. A Senate inquiry has underscored the need for comprehensive changes to better safeguard members’ interests and ensure efficient processing of benefit claims.
Looking ahead, ASIC is expected to release a report on death benefit payment claims in the superannuation industry in the near future. The ongoing regulatory focus on improving the timeliness and fairness of benefit payments reflects a broader commitment to enhancing transparency and accountability within the superannuation sector. As the legal proceedings unfold, the outcome of ASIC’s case against Australian Super will likely have significant implications for the industry as a whole.
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