A failure by one of Australia's largest superannuation funds to disclose issues to ASIC, including incorrect insurance refunds for dead members, has resulted in Federal Court action.
A failure by one of Australia's largest superannuation funds to disclose to ASIC member issues, including incorrect insurance premium refunds for dead members, has resulted in Federal Court action.
The watchdog alleges between October 2021 and September 2024, Mercer Super did not have adequate processes to comply with requirements they disclose ongoing investigations into significant breaches of their core obligations.
ASIC alleges examples of the failures include seven investigations which were not reported at all and an investigation being reported more than a year late.
Those investigations pertained to insurance premiums not being refunded after members died, member accounts not being created with default insurance, and updates to member information not being processed.
Furthermore, ASIC alleges Mercer provided false or misleading information in its reports to ASIC, understating the number of impacted members.
ASIC deputy chair Sarah Court said the case against Mercer Super was the latest in a string of actions the watchdog had taken to drive change in the way trustees serve customers.
"We allege a pattern of longstanding and systemic failure by Mercer Super to comply with the law," She said.
"These aren't just technical breaches. Allowing investigations into significant issues to drag on for months or, in some cases, over a year without reporting them to ASIC demonstrates a lack of care for customers and can put more at risk.
"As one of Australia's largest super funds, Mercer Super should have adequate systems in place to manage and monitor critical issues like this."
ASIC named member services failures in the superannuation sector as one of its key enforcement priorities in 2025.
It follows ASIC suing AustralianSuper and Cbus over alleged failures in handling death benefit and insurance claims.
"There is work underway to review and simplify the (reportable situation) regime but that doesn't mean trustees can avoid their obligations. Mercer Super's alleged failure to meet those obligations over several years is why we're taking action," Ms Court said.
In August 2024, Mercer Super was fined $11.3 million after admitting to making misleading statements on the sustainable nature and characteristics of some of its investment options.
The trustee is the seventh largest super fund in Australia with more than 950,000 members and $70 billion in assets under management.
