1. Executive summary
In Australian Securities and Investments Commission v AustralianSuper Pty Ltd [2025] FCA 102, Hespe J imposed total pecuniary penalties of $27 million on AustralianSuper for systemic failures concerning members who held multiple accounts within the same superannuation fund.
From 1 July 2013, s 108A of the Superannuation Industry (Supervision) Act 1993 (Cth) required AustralianSuper to establish rules for identifying members with multiple accounts, apply that procedure at least annually and merge accounts where the trustee reasonably considered merger to be in the member’s best interests and it was practicable to do so. AustralianSuper admitted that it failed to establish compliant rules until June 2022. As a result, 90,788 members had accounts that should have been identified and merged, causing approximately $68.96 million in losses through duplicate administration fees, insurance premiums and lost investment earnings.
AustralianSuper admitted contraventions of:
- ss 52(2)(b), 52(2)(c) and 54B(1) of the SIS Act, involving the prudent-trustee, best-interests and best-financial-interests covenants; and
- ss 912A(1)(a) and 912A(5A) of the Corporations Act 2001 (Cth), through its failure to do all things necessary to ensure that its licensed financial services were provided efficiently, honestly and fairly.
The Court described the contraventions as “very serious” and arising from systemic deficiencies over a long period. AustralianSuper had recognised internally that unintended multiple accounts disadvantaged members, particularly those who were least well off, but failed to prioritise and resource an effective solution.
Between May and June 2023, AustralianSuper paid approximately $69 million to affected members. The remediation restored members for duplicate fees, insurance premiums and lost investment earnings. The Court nevertheless imposed the $27 million penalty to deter AustralianSuper and other superannuation trustees from treating deficient compliance systems as a commercially acceptable option.
The decision is significant because it confirms that:
- member best-interests obligations require effective operational systems, not merely high-level policies;
- trustees must address financial harm affecting individual members, even where amounts may appear small at account level;
- known compliance gaps must be prioritised, funded and assigned to accountable owners;
- remediation delay may itself contribute to a contravention;
- s 912A(1)(a) is a forward-looking systems obligation and does not impose absolute perfection, but does require reasonable competence;
- a trustee cannot justify retaining duplicate accounts by reference to fund-level commercial or administrative interests; and
- self-reporting, admissions and full remediation mitigate penalty but do not eliminate the need for substantial deterrence.
2. Citation and context
Case: Australian Securities and Investments Commission v AustralianSuper Pty Ltd
Neutral citation: [2025] FCA 102
Court: Federal Court of Australia
Judge: Hespe J
Judgment and orders: 21 February 2025
Hearing: 8 October 2024
Proceeding: VID 718 of 2023
Registry: Victoria
Nature of decision: Agreed declarations, civil penalties, publicity orders and costs concerning failures to identify, merge and remediate members with multiple superannuation accounts.
AustralianSuper was the trustee of Australia’s largest superannuation fund. ASIC and AustralianSuper jointly proposed declarations, a $27 million penalty, publication orders and costs. The Court independently determined that the agreed outcome was appropriate.
3. The statutory multiple-account obligation
Section 108A of the SIS Act commenced on 1 July 2013. It required a trustee to establish rules that:
- set out a procedure for identifying members with more than one account in the fund;
- required that identification procedure to be carried out at least once each financial year;
- required multiple accounts to be merged without first obtaining member consent where the trustee reasonably believed merger was in the member’s best interests and merger was practicable; and
- prohibited charging the member a fee for the merger.
The provision responded to the problem of unintended duplicate accounts, which can cause members to pay multiple sets of administration fees and insurance premiums. The legislative purpose was protective: reducing unnecessary erosion of retirement savings and ensuring trustees considered the interests of individual members.
Compliance with s 108A was also a condition of AustralianSuper’s registrable superannuation entity licence. A failure to comply could therefore have implications beyond the specific merger obligation, including APRA licensing consequences.
4. AustralianSuper’s systems and governance failures
AustralianSuper had account-merger processes during the relevant period and merged at least 100,000 accounts relating to more than 70,000 members. Those processes were nevertheless insufficient because they did not comply with s 108A and failed to identify a further 90,788 affected members.
The deficiencies included:
- no compliant business rules requiring an annual identification procedure;
- no effective requirement to merge accounts without member consent where merger was in the member’s interests;
- inadequate identification and matching criteria;
- no systematic process for determining when retaining multiple accounts was genuinely in a member’s interests;
- failure to make individuals responsible and accountable for compliance;
- repeated human errors that were not prevented or promptly detected;
- under-resourcing;
- failure to prioritise the issue despite internal awareness;
- delay caused by absorbing the work into a larger technology project; and
- no prompt remediation framework for members who had already suffered loss.
Internal material showed that AustralianSuper understood the problem before the civil penalty period. In 2018, an internal project report stated that unintended multiple accounts were regressive and had the greatest effect on those who were least well off. AustralianSuper also publicly described multiple accounts as a fundamental industry problem, yet did not give rectification sufficient internal priority until 2021.
The Court observed that some internal correspondence suggested that personnel had lost sight of the obligation to act in the interests of individual members and instead focused on retaining accounts within the fund.
5. Affected members and financial harm
AustralianSuper’s failures affected two principal cohorts.
| Cohort | Members | Failure | Relevant period |
|---|---|---|---|
| Members with active multiple accounts on or after 6 April 2019 | 42,551 | Failure promptly to identify and merge accounts and failure promptly to remediate | 6 April 2019–11 May 2023 |
| Members whose active multiple accounts had ceased before 6 April 2019 | 48,237 | Failure promptly to remediate historical financial loss | 6 April 2019–11 May 2023 |
| Total affected beneficiaries | 90,788 |
The affected members collectively suffered $68,962,354.24 in losses, comprising:
| Loss category | Amount |
|---|---|
| Duplicate administration fees | $24,678,685.17 |
| Duplicate insurance premiums | $20,107,149.66 |
| Lost investment earnings | $24,176,519.41 |
| Total remediation | $68,962,354.24 |
For the civil penalty period beginning on 13 March 2019, approximately 43,000 members continued to hold active multiple accounts and incurred about $12 million in fees, premiums and lost investment earnings. Other affected members no longer held active duplicate accounts but continued to suffer lost earnings on amounts previously deducted.
The case demonstrates that member harm is not confined to the immediate amount of a duplicate fee. Lost investment earnings may continue to accumulate after the underlying accounts have been closed or merged.
6. Contraventions and findings
| Act | Provision | Duty or prohibition | Conduct | Court’s finding |
|---|---|---|---|---|
| SIS Act 1993 (Cth) | ss 52(2)(b), 54B(1) | Exercise the degree of care, skill and diligence of a prudent superannuation trustee | Failed promptly to identify and merge active duplicate accounts and failed promptly to remediate affected beneficiaries | Contraventions established for each affected beneficiary |
| SIS Act 1993 (Cth) | ss 52(2)(c), 54B(1) | Perform duties and exercise powers in beneficiaries’ best interests and, from 1 July 2021, best financial interests | Allowed members to continue incurring duplicate fees, premiums and lost earnings and delayed remediation | Contraventions established for each affected beneficiary |
| Corporations Act 2001 (Cth) | ss 912A(1)(a), 912A(5A) | Do all things necessary to ensure licensed financial services are provided efficiently, honestly and fairly | Failed to establish compliant rules, identify and merge duplicate accounts, and promptly remediate affected members | Civil penalty contravention established |
| SIS Act 1993 (Cth) | s 108A | Establish and apply rules for identifying and merging multiple accounts | No compliant rules were established until June 2022 | Underlying statutory failure supporting the declared contraventions |
The Court made member-level declarations under the SIS Act. It did not treat the failure merely as one abstract corporate systems breach: AustralianSuper’s duties were owed and exercisable in relation to each affected beneficiary.
The Court also made one declaration under the Corporations Act identifying three distinct omissions:
- failure to establish compliant rules;
- failure promptly to identify and merge multiple accounts; and
- failure promptly to remediate affected beneficiaries.
7. Key legal principles
Best-interests duties require member-level action
The trustee covenants are not satisfied merely because the fund acts in the collective interests of its membership or maintains generally beneficial products.
AustralianSuper had to consider whether merger was in the interests of each affected member. Where duplicate accounts caused avoidable fees, premiums and investment loss, failure to identify and merge them was inconsistent with the best-interests and best-financial-interests covenants.
The judgment therefore reinforces that trustee governance must operate at both:
- fund level, through systems and policy design; and
- individual level, through outcomes produced for affected members.
Trustee competence includes regulatory implementation
The “efficiently, honestly and fairly” obligation includes a standard of competence. It was not necessary for ASIC to prove dishonesty. AustralianSuper’s failure to implement a specific legal requirement applicable directly to trustees of superannuation funds was inconsistent with the level of competence expected of Australia’s largest superannuation fund.
The Court emphasised that s 912A(1)(a) does not impose absolute perfection. Occasional errors do not automatically establish breach. The obligation is nevertheless forward-looking and requires the licensee to identify and implement the things necessary to achieve compliant, competent and fair service delivery before individual failures occur.
Remediation delay may be a separate compliance failure
The declarations did not stop at AustralianSuper’s failure to identify and merge accounts. They also addressed its failure promptly to remediate members.
This is significant for breach management. Once a trustee identifies member harm, it must:
- determine the affected population;
- calculate loss;
- establish governance and accountability;
- resource the remediation;
- communicate with regulators and members; and
- complete payments within a reasonable period.
An inadequate or delayed remediation response may extend the period and seriousness of the original contravention.
Known problems must be prioritised and funded
The issue was known internally for years, but resources and priority were inadequate. The Court regarded failures to establish accountable processes and systems as warranting substantial penalties.
The judgment rejects the idea that material compliance work can be deferred indefinitely because it competes with broader transformation programs, technology projects or other commercial priorities.
Fund-level interests cannot displace member interests
AustralianSuper is an industry fund and did not distribute profits to shareholders. Costs avoided or fees received ultimately benefited or burdened members collectively.
That structure did not excuse the failure. The trustee still had to protect each affected member from avoidable loss. A trustee cannot justify retaining duplicate accounts because doing so spreads costs, supports scale or benefits the broader membership.
8. Remediation
AustralianSuper first reported aspects of the issue to ASIC in December 2021. It undertook significant preparatory work, including engagement with ASIC, APRA and the Australian Taxation Office, consultation with its insurer and administrator and development of a methodology addressing differing account, insurance and investment circumstances.
In August 2022, AustralianSuper established a Multiple Member Accounts Remediation Steering Committee. It assigned senior executives, engaged external remediation specialists and formed a dedicated program team.
Payments commenced in May 2023. By the end of June 2023, the program was 98.65% complete, and more than 106,000 notification letters had been issued. The agreed facts recorded that affected members had been comprehensively restored to the position they would have occupied had AustralianSuper complied from 1 July 2013.
The Court treated the remediation, self-reporting, admissions and cooperation as mitigating factors. They did not, however, remove the need for a substantial penalty given the duration, systemic nature and consequences of the failures.
9. Penalty
The Court accepted an agreed total penalty of $27 million.
Hespe J considered the amount appropriate to deter:
- repetition by AustralianSuper; and
- similar failures by other superannuation trustees.
Aggravating factors
The Court considered that:
- the failures were systemic;
- they extended over many years;
- AustralianSuper knew multiple accounts caused member harm;
- compliance was under-resourced and insufficiently prioritised;
- the conduct affected more than 90,000 members;
- losses approached $69 million;
- AustralianSuper is Australia’s largest industry superannuation fund;
- processes did not impose clear responsibility and accountability; and
- members least able to absorb unnecessary account erosion were particularly exposed.
Mitigating factors
The Court took into account that AustralianSuper:
- self-reported;
- admitted the contraventions;
- cooperated with ASIC;
- comprehensively remediated members;
- made significant systems and governance improvements;
- had no suggestion of dishonesty;
- did not retain benefits for shareholders; and
- agreed to prominent publicity orders.
The penalty nevertheless had to ensure that non-compliance with trustee obligations was not regarded as a commercially acceptable option.
10. Publicity orders and costs
The Court required AustralianSuper to publish a Federal Court notice:
- on its public website for at least 90 days;
- through a prominent click-through banner;
- on members’ secure landing pages;
- through its mobile application; and
- in a form explaining the contraventions, financial consequences, remediation and penalty.
The notice was required to state that duplicate accounts can cause members to pay multiple sets of fees and insurance premiums, eroding their retirement balances. It also recorded that AustralianSuper paid approximately $69 million to around 90,000 members.
AustralianSuper was ordered to pay ASIC’s costs up to a maximum of $500,000 for costs reasonably incurred up to and including 8 October 2024.
11. Orders and remedies
| Order or remedy | Legal basis | Amount or scope |
|---|---|---|
| Member-level declarations | ss 52 and 54B, SIS Act | 42,551 active-account members and 48,237 historical-account members |
| Corporations Act declaration | ss 912A(1)(a), 912A(5A) | Failure to establish rules, merge accounts and remediate |
| Pecuniary penalty | SIS Act and Corporations Act civil penalty provisions | $27 million |
| Publicity notice | s 1101B, Corporations Act | Website, secure member portal and mobile application |
| Remediation | Completed voluntarily before judgment | Approximately $68.96 million |
| Costs | Court order | Up to $500,000 |
12. Broader significance for superannuation trustees
Operational compliance is part of trustee duty
A trustee cannot discharge its statutory duties through policy language alone. It must translate legal requirements into:
- complete business rules;
- systems functionality;
- recurring procedures;
- defined decision criteria;
- named control owners;
- exception handling;
- monitoring; and
- remediation triggers.
The case is therefore a governance and operational-resilience decision as much as a multiple-account decision.
Small recurring deductions can create major systemic harm
Duplicate fees and premiums may appear modest for an individual member over a short period. At scale and over time, they can materially erode retirement savings.
Trustees should assess systemic harm by reference to:
- the size of the affected population;
- duration;
- compounding lost earnings;
- vulnerability of the cohort;
- insurance duplication;
- opportunity cost; and
- delay in correction.
Historical cohorts remain within the remediation perimeter
Members whose duplicate accounts had already ceased before the civil penalty period remained financially affected through lost investment earnings.
Remediation scoping should therefore include:
- former members;
- closed or transferred accounts;
- deceased members and estates;
- members whose direct fees have ceased but whose lost earnings continue; and
- historical cohorts outside the immediate incident period.
Accountability failures increase exposure
The Court specifically highlighted the absence of systems making individuals responsible and accountable for regulatory compliance.
Trustees should be able to identify:
- the executive owner of each statutory obligation;
- the operational control owner;
- the frequency of control performance;
- the evidence retained;
- escalation thresholds; and
- who approves risk acceptance or remediation extensions.
13. Relevance for AFS licensees more broadly
Although the case concerns superannuation, its s 912A reasoning applies to other AFS licensees.
A licensee may contravene the efficiently, honestly and fairly obligation where it fails to:
- implement a specific statutory requirement;
- maintain adequate procedures;
- assign responsibility;
- prevent repeated human errors;
- respond promptly to known customer harm; or
- remediate affected customers within a reasonable timeframe.
The absence of dishonest intent does not prevent liability. Nor does the fact that some customers were eventually remediated.
The decision is particularly relevant to:
- fee-deduction controls;
- insurance administration;
- inactive and duplicate accounts;
- member and customer data matching;
- product migrations;
- automated account processes;
- remediation governance; and
- large-scale legacy-system defects.
14. Recommended controls
| Audience | Control type | Legal rationale | Risk indicator | Practical control |
|---|---|---|---|---|
| Trustee board | Governance | ss 52 and 54B require prudent and member-focused administration | Known systemic issue remains unresolved | Require time-bound remediation and executive accountability |
| Chief operating officer | Governance | Systems must implement s 108A rules | Multiple systems hold inconsistent member identities | Assign end-to-end account-consolidation ownership |
| Member administration | Preventative | Duplicate accounts must be identified annually | Same TFN, surname or other identifiers across accounts | Run periodic matching and exception processes |
| Insurance team | Preventative | Duplicate premiums erode member balances | Multiple insurance covers for the same member | Assess whether coverage duplication benefits the member |
| Compliance | Detective | s 912A requires forward-looking controls | Policy exists but procedure is incomplete | Test rule design, operation and annual completion |
| Data governance | Preventative | Accurate member matching is essential | Inconsistent names, addresses or identifiers | Implement data-quality and identity-resolution controls |
| Risk committee | Governance | Known compliance gaps require priority and funding | Repeated deferral into transformation projects | Escalate aged material risks and prohibit indefinite extensions |
| Remediation team | Corrective | Delay can extend member detriment | Affected population not promptly identified | Establish cohort, loss and payment workstreams immediately |
| Finance and actuarial | Corrective | Lost earnings form part of member harm | Remediation limited to direct fees | Include investment earnings and insurance effects |
| Internal audit | Detective | Accountability and evidence are required | No named control owner or completion record | Perform independent obligation-to-control assurance |
15. Recommended next steps
Superannuation trustees should:
- verify that their multiple-account rules fully comply with s 108A;
- confirm that account identification is conducted at least annually;
- review matching logic for false negatives and data-quality limitations;
- assess whether all automatic and manual exclusions remain supportable;
- test whether duplicate insurance and fees are considered in the member-interest assessment;
- identify historical members who may have suffered lost investment earnings;
- document accountable executives and operational owners;
- review all aged compliance issues that have been absorbed into larger transformation projects;
- establish trigger-based remediation governance; and
- report system effectiveness, exceptions and overdue rectification to the trustee board.
16. Referenced cases
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 — civil penalties serve deterrence and must prevent non-compliance being treated as an acceptable cost of business.
Australian Securities and Investments Commission v Macquarie Bank Ltd [2024] FCA 416 — s 912A(1)(a) is forward-looking and requires effective controls against known risks.
Australian Securities and Investments Commission v Commonwealth Bank of Australia [2022] FCA 1422 — s 912A(1)(a) does not require absolute perfection but imposes a reasonable standard of performance.
Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liq) (No 3) [2020] FCA 208 — efficiently, honestly and fairly includes competence, ethical soundness and reasonable service standards.
17. Broader impact
The judgment sets a significant enforcement benchmark for superannuation trustees by confirming that member best-interests obligations require effective operational systems, not merely policies or broad governance commitments. Trustees must translate statutory duties into functioning business rules, accountable ownership, recurring controls and timely remediation. Known compliance gaps cannot be deferred indefinitely because they compete with technology programs or other strategic priorities.
The decision also broadens the regulatory significance of operational failures. AustralianSuper’s contraventions arose from inadequate systems for identifying and merging duplicate accounts and from delayed remediation, even without dishonesty. This reinforces that s 912A(1)(a) and trustee covenants can be breached through prolonged inaction, under-resourcing and weak accountability where those failures cause avoidable customer or member harm.
More broadly, the case increases expectations for large financial institutions managing legacy systems and high-volume customer data. Small recurring fees or premiums may produce substantial systemic harm when applied across large cohorts and over long periods, including through lost investment earnings. Boards and executives should therefore treat data-quality, account-matching and remediation controls as core legal and governance obligations, with clear escalation where deficiencies remain unresolved.
This analysis is suitable for internal legal, governance and compliance review, but final positions should be confirmed against the complete judgment, current legislation and any subsequent appellate or regulatory developments.