ASIC seeks $27 million penalty against Australian Super
By Eliza Bavin
ASIC is seeking a major $27 million penalty against AustralianSuper in the Federal Court.
ASIC alleges that, for almost 10 years, AustralianSuper failed to have adequate policies and procedures to identify members who held multiple AustralianSuper accounts and to merge those accounts, where doing so was in the member's best interests.
ASIC said 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.
The regulator said in this case, approximately 90,000 AustralianSuper members were affected, with total cost to members of approximately $69 million.
ASIC's lawyer has asked the court to impose the massive $27 million penalty against the super fund, saying it reflects the length of time the contraventions continued for and that it would act as a deterrent to other super funds.
"The penalties that we say are appropriate, $27 million, we say do have that necessary sting or burden for general deterrence purposes and, in circumstances where it does seem that AustralianSuper has done a lot, a very great deal, to bring itself into a position where this won't happen again and to, as it were, make amends for what it did do, we think that specific deterrence is of a lower order than general deterrence in this case and that whatever penalty would be necessary for specific deterrence is comfortably within that $27 million," Tim Begbie KC told the court.
Justice Lisa Hespe agreed the contraventions were serious and that there was a concern about the effect on members' retirement savings.
"I will make it clear that I am very concerned that this conduct is serious.
"It is serious, not just for the consequences for members, but, to me, there is a pattern emerging in some of these cases about priority given to systems and to problems that emerge in automated systems."
"I understand that there are competing demands on the attention and funds of corporates, superannuation trustees and the like, but, to me, the underlying conduct that is of serious concern is the priority given to and the focus that needs to be given in this modern age to ensuring the systems do what they're supposed to do."
Justice Hespe added that in this case, a large penalty may be warranted against the super fund.
"It's not so much that problems emerge. Problems will always emerge.
"Not prioritising the rectification of problems, because it's too hard, it's not interesting, it's going to divert resources from new projects or new ideas or marketing, whatever it might be, is of real concern and I want to make it clear that that conduct is serious, and I do regard the penalties in this case do warrant the sums in the nature of those proposed, because the conduct is extremely serious."
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