ASIC reported that the court found between October 2021 and September 2024, Mercer Super’s compliance systems, especially around reportable situations in relation to the Corporations Act, were inadequate. This included charging insurance premiums to members who had died.
A spokesperson for the super trustee said Mercer acknowledged this and apologised that it fell short of its obligations under the reportable situations regime.
“The agreed facts submitted to the Federal Court shows these shortcomings were not deliberate and that Mercer Super did not financially benefit from them. There is no allegation of financial or non-financial loss to members in relation to this matter,” the spokesperson said.
“To address the issue, we have made important investments across Mercer Super, putting in place additional personnel, and improving our processes, systems, and technology.”
They added that the penalty will be paid by Mercer and not by the super fund or its members.
At the time of the failure, ASIC found that Mercer Super failed to report seven reportable investigations to ASIC and submitted another too late.
“In relation to the investigation that was reported late to ASIC, the Court found that Mercer Super failed to take all reasonable steps to ensure the reports to ASIC were accurate and provided false or misleading information which understated the number of members impacted by the incident being investigated,” the regulator said.
ASIC chair Sarah Court said the systemic deficiencies identified were unacceptable for a superannuation trustee of Mercer Super’s size and market position.
“These failures undermined a critical safeguard designed to protect consumers and exposed fundamental weaknesses in Mercer Super’s systems and processes,” she explained.
“This was not an isolated oversight. It was a sustained systemic issue that continued for years after the regime was introduced, which is unacceptable for a fund entrusted with $80 billion worth of retirement savings for more than a million members.”
This comes as the regulator has called out super trustees for poor oversight and governance practices, a new report identifying deficiencies in advice fee deductions and investment patterns.
Commenting on the report’s findings, ASIC commissioner Simone Constant said: “It’s clear some trustees are not doing enough to protect their members, despite repeated warnings from ASIC and APRA about the dangers of poor oversight. Nor have they learned lessons from the collapses of the Shield Master Fund and First Guardian Master Fund, which cost more than 11,000 Australians around $1 billion in retirement savings.”
“Many of the clear gaps in oversight are deeply concerning and difficult to justify. Trustees should not expose their members’ retirement savings to unacceptable risks in the pursuit of volume growth,” Constant added.
