Australia’s corporate watchdog, ASIC, has taken legal action against Mercer Super, a $70 billion superannuation fund, alleging systemic failures. The allegations include charging insurance premiums to deceased members, creating accounts without default insurance, and failing to update member information.
Mercer Super, the seventh-largest super fund in Australia, with over 950,000 members, is facing scrutiny for allegedly providing false or misleading information to ASIC. The regulator claims that Mercer Super did not report investigations into significant breaches promptly, as required by law.
This legal action by ASIC follows similar cases against other super funds, indicating a growing trend of regulatory scrutiny in the industry. Australian Super and Cbus have also faced lawsuits for delays in processing death benefit claims and disability payments.
ASIC alleges that Mercer Super had inadequate systems in place between October 2021 and September 2024, resulting in failures to report investigations and compliance breaches. These failures include issues like incorrect insurance premium refunds for deceased members and delays in processing member information.
ASIC’s Deputy Chair, Sarah Court, emphasized the seriousness of the allegations, stating that Mercer Super’s conduct demonstrates a lack of care for customers. The regulator is seeking declarations and penalties from the court, highlighting the importance of compliance and accountability in the superannuation sector.
Superannuation funds have been put on notice to improve their handling of death benefit claims, with ASIC calling for better customer service and claims handling. The regulator has issued recommendations to trustees and is focusing on how they respond to customer complaints.
ASIC’s ongoing efforts to reform the superannuation sector aim to protect consumers and ensure that funds meet their legal obligations. The regulator’s actions against Mercer Super underscore the need for trustees to uphold industry standards and address systemic issues promptly.
In response to the allegations, Mercer Super stated that it is reviewing ASIC’s claims and cooperating with the investigation. The fund highlighted that the matter pertains to breach reporting obligations introduced by ASIC in late 2021.
ASIC’s pursuit of regulatory compliance in the superannuation industry reflects a broader trend of increased oversight and accountability. The watchdog’s actions signal a shift towards greater transparency and scrutiny to safeguard the interests of fund members and ensure industry integrity.
As the legal proceedings unfold, the outcome of ASIC’s case against Mercer Super will likely have implications for the broader superannuation sector. The regulator’s focus on improving governance and compliance standards underscores the importance of maintaining trust and integrity in Australia’s financial services industry.
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