The Australian Securities & Investments Commission (ASIC) has launched legal action against Mercer Super alleging it failed to report investigations into serious member services issues, including incorrect insurance premium refunds for dead members.
ASIC has alleged Mercer Super had inadequate systems between October 2021 and September 2024 to comply with its requirement to promptly report ongoing investigations into significant breaches of its core obligations.
Deputy Chair Sarah Court said the corporate regulator 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,” Court said in a media release.
“As one of Australia’s largest super funds, Mercer Super should have had adequate systems in place to manage and monitor critical issues like this.”
Examples of alleged systems failures included failing to report seven investigations, and reporting another one more than a year late, 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 is seeking declarations and penalties from the Federal Court in litigation launched less than a month after Mercer Super warned its one million members that their details may have been stolen during a break-in at a post office.
Mercer Super (Australia) Limited (MSAL) acknowledged the ASIC action, saying the matter related to breach reporting obligations introduced in late 2021, it had cooperated with ASIC during the investigation of this matter and was reviewing the claim.
“We note that ASIC has expressly stated in its pleading that it does not allege that MSAL set out to deliberately mislead ASIC in respect of the matters set out in the claim,” Mercer Super said in a statement.
It is also a year since the $74 billion fund was fined $11.3 million after it admitted making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
Mercer Super is managed by Marsh & McLennan’s (NYSE: MMC) global consulting subsidiary Mercer.
