The Australian Securities and Investments Commission (ASIC) said the total cost to members as a result of the alleged failures by AustralianSuper was approximately $69 million.

The watchdog has commenced civil penalty proceedings against AustralianSuper, and alleges that for almost ten years the fund failed to have adequate policies and procedures to identify members who held multiple accounts and to merge those accounts.

ASIC further alleges that the superannuation giant then continued to charge multiple sets of fees and insurance premiums to those members.

“Failing to merge duplicate accounts within a fund can have significant financial consequences for members who end up paying multiple sets of fees, eroding their superannuation balance over time,” ASIC deputy chair Sarah Court said.

ASIC said it was concerned that AustralianSuper did not take “adequate steps” to resolve the issue until late-2021 and early-2022, despite allegedly being aware in 2018 of the number of multiple member accounts within the fund and possible gaps in its policies and procedures.

“ASIC expects that superannuation funds will put their members first and promptly address issues that cause members to face multiple sets of fees and insurance premiums,” Court added.

“We expect these issues to be identified and rectified quickly, including compensating members if a trustee has failed to comply with its obligations.”

The watchdog is seeking declarations, pecuniary penalties and other orders against AustralianSuper which has more than 2.87 million members and $258 billion in assets under management as of 30 June 2022.

AustralianSuper has already started remediating members who held multiple accounts within the fund at and from 30 June 2024, for the period 1 July 2014 to 31 March 2023.

“Having identified this issue, we have strengthened our processes to identify and combine multiple accounts and remain committed to minimising these for members,” it said.

“AustralianSuper will continue to work with ASIC to bring these proceedings to a resolution.”

ASIC noted that this issue was not exclusive to AustralianSuper. More than three million people across the country have multiple superannuation accounts, which happens when individuals change jobs and their employer creates a new account on their behalf.

Australian Taxation Office data showed about half a million people had two or more accounts within the same fund.

– with AAP