One of Australia’s largest industry superannuation funds has announced it will be refunding millions to its members for failing to follow rules surrounding the creation of multiple accounts.
AustralianSuper, one of the nation’s top-performing super funds, has announced it will refund around $70 million to approximately 100,000 of its members. An internal review found the fund was not complying with rules intended to stop the duplication of accounts (and account fees).
Introduced in 2013, Section 108A of the Superannuation Industry (Supervision) Act requires super funds to conduct a review each year to identify people who hold multiple accounts and either cancel the duplicate account or merge it with another account if appropriate.
A person can end up with multiple accounts in the same fund if they’ve had a series of jobs in the same industry and were signed up for the same default fund more than once.
“The fund regularly identifies and combines multiple accounts held by a single member to help those members avoid extra fees. Following our review, we identified that our processes did not cover all instances of multiple member accounts,” AustralianSuper said in a statement.
“Around 100,000 impacted members and former members will be contacted in the coming months to inform them of this issue and confirm the actions we are taking in response.”
AustralianSuper has self-reported the incident to both the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA), as the two agencies are jointly responsible for enforcing the act.
Rosie Thomas, executive director of advocacy group Super Consumers Australia, says that although AustralianSuper self-reporting is commendable, financial regulators are not doing enough to ensure the multiple account issue is properly addressed.
“Paying extra fees and insurance premiums for more than one account really adds up,” she says.
“The laws to encourage super funds to get rid of multiple accounts within their own fund are a decade old. We’ve never seen any public statement or actions from the regulators on this issue. It is alarming that such a major player is only discovering issues now.”
Ms Thomas challenged other super funds to behave in the way AustralianSuper has, and identify any problems themselves.
“We’re calling on all funds to review their processes and follow AustralianSuper’s example by reporting the outcome to ASIC and APRA,” she says.
“Where funds are not complying, we expect strong transparent action from the funds and regulators.”
Are you with AustralianSuper? Is it possible you might have multiple accounts? Let us know in the comments section below.