Australia Court Fines Australia $69 Billion Pension Fund Cbus $15.3 Million (AUD 23.5 Million) in Penalty for Serious Delay in Handling 7,000+ Insurance Claims for Death Benefits & Total Permanent Disability (TPD) Insurance
26th November | Hong Kong
An Australia court has fined Australia $69 billion pension fund Cbus $15.3 million (AUD 23.5 million) in penalty for serious delay in handling 7,000+ insurance claims for death benefits & total permanent disability (TPD) insurance. Australian Securities & Investments Commission (ASIC) (25/11/25): “One of Australia’s largest superannuation fund trustees has been ordered by the Federal Court to pay a penalty of $23.5 million for unreasonable delays experienced by thousands of members and claimants arising from serious failures to handle insurance claims in a timely manner. The penalty has been imposed against United Super Pty Ltd, the trustee of the Construction and Building Unions Superannuation Fund (Cbus), following admissions by Cbus that serious failures caused delays in processing death benefits and total and permanent disability (TPD) insurance claims and impacted more than 7,000 Australians in distressing situations. The penalty exceeds the $18.5m in revenue United Super declared in the 2024 financial year. The penalties come on top of Cbus’s own remediation program to pay approximately $32 million in compensation to the estimated 7,402 affected claimants and members for lost earnings and wrongfully charged fees. ASIC Deputy Chair Sarah Court said Cbus’s failures needlessly exacerbated the distress of people who were already in upsetting situations … … His Honour noted one case in which the widow of a Cbus member called into ABC radio in June 2023 to highlight a 15-month delay processing her late husband’s death benefit claim. After she complained to the media about ongoing poor service, including a lack of communication and extensive periods on hold, Cbus commenced an investigation that led to the breach report to ASIC. Between October 2022 and November 2024, Cbus outsourced its claims processing to Australian Administration Service Pty Limited (AAS). The Court found that between 27 March 2023 and 1 May 2023, as a percentage of all open claims, between 48% and 56% of all death claims (numbering between 438 and 479 claims) had been open for more than 365 days, and between 38% and 43% of all TPD claims (numbering between 391 and 409 claims) had been open for more than 365 days.” Background – MUFG Pension & Market Services Holdings Limited, is a provider of services in Australia’s superannuation administration industry. It operates through its subsidiaries, including Australian Administration Services Pty Limited ACN 003 429 114 (AAS), which offers administrative services to United Super. Since 1 January 2021, United Super has been authorised under its Australian Financial Services licence to provide trustee services, including the handling of claims for Cbus Superannuation Fund. In 2021, United Super engaged AAS under an administration agreement to provide claims handling administration services with respect to Cbus. Those services included communicating with members, obtaining required documentary material and delivering this material to the Trustee and/or Insurer as the case may be. United Super self-reported the delays in processing claims to ASIC in August 2023. More info below:
“ Australia Court Fines Australia $69 Billion Pension Fund Cbus $15.3 Million (AUD 23.5 Million) in Penalty for Serious Delay in Handling 7,000+ Insurance Claims for Death Benefits & Total Permanent Disability (TPD) Insurance “
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The Court declared that Cbus contravened the Corporations Act by failing to do all things necessary to ensure Death, terminal illness and TPD claims (Claims) were handled efficiently, honestly and fairly by failing to:
- take all reasonable steps to ensure Claims were being processed in a reasonable period of time
- ensure that it held accurate and complete data necessary to determine the volume and age of all Claims
- ensure the relevant committees had sufficient oversight over issues with processing Claims, and
- adequately monitor and manage the administrator’s performance under the Administration Agreement.
The Court also found Cbus had contravened the Corporations Act on two further occasions by failing to report the matters to ASIC within the required time frame. Reports were required to be made to ASIC on 3 March 2023 and 20 July 2023, but nothing was reported to ASIC until 5 August 2023. The report was made after criticism had occurred on an ABC Melbourne Radio program.
In addition, Cbus was also ordered to pay half a million dollars towards ASIC’s legal costs and undertake a compliance program requiring it to obtain expert reports on whether it now has appropriate systems and processes in place.
Australia Court Fines Australia $69 Billion Pension Fund Cbus $15.3 Million (AUD 23.5 Million) in Penalty for Serious Delay in Handling 7,000+ Insurance Claims for Death Benefits & Total Permanent Disability (TPD) Insurance
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