Australia's corporate regulator has broadened its wave of legal action in the A$4.2 trillion (US$2.6 trillion) superannuation industry over delayed insurance payouts by prosecuting the country’s biggest pension fund, AustralianSuper.
The Australian Securities and Investments Commission (ASIC) said it was suing AustralianSuper in the Federal Court over the delayed processing of nearly 7,000 death benefit claims.
ASIC has alleged AustralianSuper failed to process death benefit claims efficiently, honestly and fairly between 1 July 2019 and 18 October 2024, when it took between four months and four years to assess at least 6,897 claims.
It also alleged the super fund failed to pay benefits as soon as practicable after the death of at least 752 members, in one case taking 1,140 days to pay and in others taking 438, 412 and 366 days.
ASIC Deputy Chair Sarah Court said it was vital that death benefit claims were 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,” Court said in a media release.
“At its heart, this matter is about protecting vulnerable Australians and their families."
Last November, ASIC initiated civil penalty proceedings against United Super Pty Ltd, the trustee of Cbus, alleging delays in processing death benefit and total and permanent disability claims affecting more than 10,000 members and claimants.
“It is the trustee's responsibility to ensure sufficient resources are available to service members and claimants, and that adequate oversight of systems is maintained to deliver all services as promised to members. Accountability cannot be outsourced," Court said.
“Our work on member services will continue with the release of our death benefits report in coming weeks.”
ASIC is seeking penalties, declarations, an adverse publicity order and orders for compliance matters to be implemented.
“We are considering ASIC's claim carefully and will respond to the substance of the claim in due course,” Australian Super said in a statement.
The fund brought death claims processing in-house after a backlog of claims due to a sharp increase in member deaths from COVID and reduced pandemic staffing levels was not reduced sufficiently.
