ASIC sues Mercer Super over failure to report internal investigations
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The news: The Australian Securities and Investments Commission (ASIC) has launched new proceedings in Federal Court today, claiming one of Australia's largest superannuation funds, Mercer Super, failed to inform the regulator about investigations into serious member services issues.
The context: ASIC alleges that between October 2021 and September 2024, Mercer Super had inadequate systems in place to comply with the reportable situations regime, which requires Australian financial services licensees to promptly report ongoing investigations into significant breaches of their core obligations.
The regulator claims Merger Super failed to report seven investigations, and reported a further investigation more than a year late.
These included unreported investigations 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 also alleges Mercer Super provided false or misleading information in reports to the regulator, which understated the number of members who were impacted.
ASIC is seeking declarations and penalties from the court.
Mercer Super is the seventh largest super fund in Australia with more than 950,000 members and $70 billion in assets under management.
What they said: "We allege a pattern of longstanding and systemic failure by Mercer Super to comply with the law," said ASIC deputy chair Sarah Court.
"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."
The source: ASIC
