The Australian Securities and Investments Commission (ASIC) has launched legal action against AustralianSuper, alleging the fund took excessive time to process death benefit claims, delaying millions of dollars in payouts.
According to documents filed in the Federal Court, AustralianSuper, which manages A$355 billion in assets, took between four months and four years to assess at least 6,897 death benefit claims between 2019 and 2024. Nearly 1,000 of those claims involved members with valid binding death benefit nominations at the time of death. ASIC also alleges that on at least 752 occasions, the fund failed to pay benefits as soon as practicable, with one case taking 1,140 days despite all required information being available.
ASIC chair Joe Longo, speaking at the Australian Institute of Company Directors conference, warned that some super fund trustees were failing in their responsibilities. Data shows AustralianSuper accounted for nearly a quarter of all complaints to the Australian Financial Complaints Authority (AFCA) about death benefits in 2023 and 2024. Last financial year, AustralianSuper members lodged over 1,500 complaints with AFCA—three times more than the next-worst performing fund, Australian Retirement Trust.
Pandemic delay excuse
AustralianSuper attributed delays to the COVID-19 pandemic, citing a rise in member deaths and staffing shortages. However, legal documents reveal delays dating back to 2019, before the pandemic began. The fund stated it was reviewing ASIC’s claim and would respond in due course.
The delays surfaced a month after AustralianSuper entered an administration and custody agreement with Link, now MUFG Pension & Market Services, which has been linked to broader service failures in the superannuation sector. ASIC has repeatedly warned that trustees cannot outsource their accountability, a stance reiterated by ASIC deputy chair Sarah Court, who stated, “It is the trustee’s responsibility to ensure sufficient resources are available to service members and claimants.”
In response to ongoing concerns, AustralianSuper has established a 75-member “bereavement centre” to manage death benefits and plans to remove MUFG from all member-facing services. In November, the fund announced it would repay A$4.2 million to the families of deceased members as compensation for delays in processing claims.
The legal action follows ASIC’s recent lawsuit against the A$94 billion construction industry super fund Cbus for similar delays in paying death and disability claims. AustralianSuper was also fined A$27 million last month for failing to merge duplicate accounts for over 90,000 members over nine years, with affected members receiving A$69 million in compensation.
ASIC is seeking penalties, declarations, an adverse publicity order, and compliance measures in its case against AustralianSuper. The regulator is expected to release an industry-wide report on death benefit claims in the coming weeks.