'Less revenue for us': AustralianSuper on closing multiple accounts

Fronting the Senate Economics Committee, the Australian Securities and Investments Commission (ASIC) confirmed internal communications between staff at AustralianSuper played a significant role in shaping its case against the super fund.

Senator Andrew Bragg, reading from the judgement that was recently handed down against AustralianSuper, asked ASIC commissioner Sarah Court about the communications.

"You obtained internal communications that read, 'It benefits the member by stopping the $1.50 charge on their duplicate account, but for us it means less revenue'. Does this indicate the internal thinking about how they were treating their members?" Bragg asked.

In response, Court said: "I can't speak for AustralianSuper, but clearly that kind of communication was something that we put before the court in the proceedings as one of the pieces of evidence that we relied upon, and obviously there were concerns about any action by any superannuation trustee that indicates an attempt to benefit the trustee over the interests of the member."

During the exchange, it was also revealed ASIC could have sought a significantly higher penalty of $140 million against the fund. Bragg questioned ASIC as to why it did not seek the maximum penalty, despite the very large number of member accounts that were impacted.

However, Court explained that because members essentially retained the benefit from AustralianSuper's wrongdoing, and because there is law prohibiting penalties being paid directly from member funds, a lower penalty was sought.

Court also pointed out ASIC can only make submissions to the court to seek penalties, but ultimately it is the decision of the presiding judge.

The exchange comes after the Federal Court fined the super fund $27 million for dragging its feet on a multiple account bungle that lasted more than four years.

Judge Hespe found that AustralianSuper failed to promptly identify and merge members' multiple accounts in the way the law required for the period between March 13, 2019 and May 11, 2023.

More than 90,000 members incurred $69 million in losses from multiple administration fees and insurance premiums and investment earnings.

This article first appeared on Financial Standard

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