ASIC has launched Federal Court action against Mercer Super. The regulator alleges the fund failed to report investigations into serious member services issues. That includes incorrect insurance premium refunds for dead members.
ASIC says the failings occurred between October 2021 and September 2024. It alleges Mercer Super did not have adequate systems to meet the reportable situations regime. Licensees must promptly report investigations into significant breaches of core obligations.
ASIC alleges seven investigations were not reported at all. Another was reported more than a year late. The issues under investigation included insurance premiums not being refunded correctly after a member died. Some member accounts were not set up with default insurance. Updates to member information were not processed by the trustee.
The regulator also alleges Mercer Super lodged reports to ASIC that were false or misleading. It says the fund understated how many members were impacted.
‘We allege a pattern of longstanding and systemic failure by Mercer Super to comply with the law.’ Ms Court said.
‘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.
‘As one of Australia’s largest super funds, Mercer Super should have had adequate systems in place to manage and monitor critical issues like this.
‘The reportable situation regime is in place to ensure ASIC can identify misconduct early and take action to protect Australians. Customers expect their super funds to abide by the law.’
ASIC is seeking declarations and penalties.
Member services failures in super are a 2025 enforcement priority for ASIC. In the past year, ASIC has sued AustralianSuper and Cbus over alleged claims handling failures. It has issued 34 recommendations to improve death benefit claims handling. It has also flagged a focus on how trustees respond to complaints.
ASIC said it is reviewing the reportable situations regime to simplify compliance. It says Mercer Super’s alleged conduct still falls well below expectations for a trustee of its size.
‘There is work underway to review and simplify the regime but that doesn’t mean trustees can avoid their obligations. Mercer Super’s alleged failure to meet those obligations over several years is why we’re taking action’, Ms Court said.
Mercer Super is the seventh largest super fund. It has more than 950,000 members and $70 billion in assets under management.
In August 2024, Mercer Super was fined $11.3 million in a greenwashing case. It admitted making misleading statements about some sustainable investment options.
Court documents are available on ASIC’s website. Mercer Super has been contacted for comment.
