Australia’s largest superannuation fund, Australian Super, is being sued by the corporate regulator for “significant delays” in processing thousands of death benefit claims and failing to pay out millions of dollars to deceased members’ families.
ASIC alleges the super fund “failed to process death benefit claims efficiently, honestly and fairly” between July 2019 and October 2024, and took anywhere between four months and four years to assess almost 7,000 death benefit claims.
The corporate regulator also alleges that Australian Super “failed to pay members’ benefits as soon as practicable after the member’s death in respect of at least 752 members”.
In one case, ASIC claims that it took Australian Super more than three years to pay a claim to a deceased member’s relative, despite having all of the information required.
“At its heart, this matter is about protecting vulnerable Australians and their families,” ASIC deputy chair Sarah Court said.
“‘It is vital that death benefit claims are processed in a timely manner.
“Delays are likely to cause further pain and anxiety to people who are already suffering from grief, making what is already a difficult time even harder.“
Australian Super is the largest superannuation fund in the country, managing over $355 billion of retirement savings for almost 3.5 million members.
It is the super fund’s latest run-in with the corporate regulator after it agreed to a $27 million fine in the Federal Court for failing to merge duplicate member accounts as required by law.
In a statement, Australian Super said it is “considering ASIC’s claim carefully and will respond on the substance of the claim in due course”, and welcomed “the regulator’s industry-wide attention on this matter”.
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Super funds ‘on notice’ after Cbus
The legal action is the latest by the corporate regulator as it cracks down on death and disability payment delays.
Last year, ASIC sued industry superannuation fund Cbus in the Federal Court for failing to process more than 10,000 death and disability payments in a timely manner. Cbus has apologised for the delays and has committed to compensating affected members.
After appearing at a Senate committee hearing last November, ASIC said it was not just Cbus who had fallen foul of the regulator, and that all superannuation funds had been “put on notice”.
“We think that the delays in payment of death benefits and disability claims in the superannuation sector are significant,” Ms Court said at the time.
“We have done … a big, deep surveillance piece in relation to this, we’ve looked at a whole range of different superannuation funds.
“We are focusing on this issue very intensively in the coming months.”
ASIC is expected to release its report into death benefit payment claims in the superannuation industry in the coming weeks.
In February, a Coalition-led Senate inquiry delivered a scathing assessment of Australia’s $4 trillion superannuation industry, and called for an overhaul of the sector to better protect members.
