Mercer Super is in the firing line, accused by ASIC of failing to tell it about member services issues, including incorrect insurance premium refunds for deceased members.
The regulator alleges in new proceedings launched in the Federal Court that between October 2021 and September 2024, Mercer Super had inadequate systems in place to comply with the reportable situations regime, which requires Australian financial services licensees to promptly report ongoing investigations into significant breaches of their core obligations.
Examples of these systems failures, alleges ASIC, include Mercer Super failing to report seven investigations at all, and another investigation being reported more than a year late, including investigations into:
- Insurance premiums not being refunded correctly after members had died
- Member accounts not being created with default insurance, and
- Updates to member information not being processed by the trustee
ASIC also alleges Mercer Super provided false or misleading information in reports to the regulator, which it claims understated the number of members who were impacted.
…over a year without reporting them to ASIC demonstrates a lack of care for customers..
Mercer Super is the seventh largest super fund in Australia with more than 950,000 members and $70 billion in assets under management.
In August 2024 Mercer Super was fined $11.3m after it admitted making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
ASIC Deputy Chair Sarah Court said: “We allege a pattern of longstanding and systemic failure by Mercer Super to comply with the law.
“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.
“Mercer Super should have had adequate systems in place to manage and monitor critical issues like this.”
Over the past 12 months, ASIC has sued AustralianSuper and Cbus over alleged failures in handling death benefit and insurance claims.
“There is work underway to review and simplify the 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,” Court said.
ASIC is seeking declarations and penalties from the court.
Also see:
- ASIC Sues Fortnum
- Superfund Sued Over Claims Handling Failures
- ASIC Issues Infringement Notices to Zurich
- ASIC Sues AustralianSuper
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