Australia Court Fines $55 Billion Mercer Super $7.1 Million (AUD 10.3 Million) for Failure to Report Serious Member Services Issues & Inadequate Systems In Place from 2021 to 2024, Cases Include Insurance Premiums Incorrectly Refunded after Members Died, Member Accounts Created Without Default Insurance, Member Information Updates Not Processed by Trustee
29th June 2026 | Hong Kong
Australia court has fined Mercer Super ($55 billion AUM & 1 million members) $7.1 million (AUD 10.3 million) for failure to report serious member services issues & inadequate systems in place from 2021 to 2024. The cases include 1) Insurance premiums incorrectly refunded after members died, 2) Member accounts created without default insurance & 3) Member information updates not processed by trustee. In 2025 August, Australian Securities & Investments Commission (ASIC) filed a lawsuit against Mercer Super for failure to report serious member services issues & inadequate systems in place from 2021 to 2024. The cases include 1) Insurance premiums incorrectly refunded after members died, 2) Member accounts created without default insurance & 3) Member information updates not processed by trustee. Australian Securities and Investments Commission (ASIC) 29/6/26: “The Federal Court has ordered Mercer Super pay penalties totalling $10.3 million for systemic failures to report investigations into significant member services issues to ASIC, including an investigation into insurance premiums continuing to be charged after members had died, and only refunded later. The Court found that between October 2021 and September 2024, Mercer Super’s systems for complying with the Corporations Act’s reportable situations regime were inadequate. The regime requires Australian financial services licensees to promptly notify ASIC of investigations into potentially significant breaches of their core obligations. The Court also found that Mercer Super failed to report seven reportable investigations to ASIC at all and it reported another investigation 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 investigations that Mercer Super either failed to report on time or did not report at all included investigations concerning: 1) failure to update member accounts which led to higher fees and less favourable insurance policies applying to members 2) failure to allocate $64 million in member funds in a timely manner, and 3) failure to provide death and total and permanent disability insurance cover for eligible members. In handing down the decision, her Honour Justice Button found that ASIC’s supervisory role had been seriously compromised given the duration of the investigations that Mercer Super failed to report. Her Honour also found that Mercer Super was on notice that its compliance systems were not adequate and of the risk that investigations were not being identified and reported to ASIC as required. The reportable situations regime is intended to give ASIC early visibility of misconduct, ensure licensees prioritise investigations and remediation, and strengthen transparency across the financial services sector. Holding super trustees to account for member services failures is one of ASIC’s 2026 enforcement priorities.”
“ Australian Securities and Investments Commission (ASIC) Issues Warning to Australia Retirement Savings Superannuation Trustees to Address Failures to Protect Retirement Savings Including Harmful Advice Fee Deductions, Unusual Fees & Investment Platforms and High-Risk Switching Activity, Collapses of Shield Master Fund & First Guardian Master Fund Resulted in $690 Million (AUD 1 Billion) Losses to 11,000 Australia Citizens “
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ASIC Chair Sarah Court: “These failures undermined a critical safeguard designed to protect consumers and exposed fundamental weaknesses in Mercer Super’s systems and processes. 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. When investigations into serious member service issues are not reported to ASIC as required by law, this can allow problems impacting members to persist unchecked, increasing the risk of ongoing harm. The Court’s decision sends a strong message to the superannuation sector that accurate and timely reporting is not optional and when a fund falls short, we will take action.
Background – Mercer Super is the seventh largest super fund in Australia by members with over one million members and almost $80 billion in assets under management. Separately, in August 2024, Mercer Super was fined $11.3 million after it admitted making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options (24-173MR). The proceedings form part of ASIC’s broader focus on lifting standards across the superannuation sector and improving outcomes for members. In November 2025, United Super Pty Ltd, the trustee of the Construction and Building Unions Superannuation Fund (Cbus), was ordered to pay a $23.5 million penalty for serious failures in processing members death benefits and insurance claims (25-286MR). In May 2026, the Federal Court found Telstra Super failed to comply with its internal dispute resolution procedures with about one third of complaints made between October 2021 and January 2023 not answered within 45 days and some delayed over 100 days. A penalty hearing on the matter is pending (26-091MR). In March 2025, ASIC commenced Federal Court action against AustralianSuper Pty Ltd, the trustee of Australia’s largest superannuation fund, alleging delays in the processing of nearly 7,000 death benefit claims (25-034MR). In March 2025, ASIC handed down 34 recommendations to super trustees to improve the way they handle death benefit claims (25-049MR).
Australian Securities & Investments Commission (ASIC) Files Lawsuit Against Mercer Super ($70 Billion AUM & 950,000 Members) for Failure to Report Serious Member Services Issues & Inadequate Systems In Place from 2021 to 2024, Cases Include Insurance Premiums Incorrectly Refunded after Members Died, Member Accounts Created Without Default Insurance, Member Information Updates Not Processed by Trustee
19th August – Australian Securities & Investments Commission (ASIC) has filed a lawsuit against Mercer Super ($70 billion AUM & 950,000 members) for failure to report serious member services issues & inadequate systems in place from 2021 to 2024. The cases include 1) Insurance premiums incorrectly refunded after members died, 2) Member accounts created without default insurance & 3) Member information updates not processed by trustee. ASIC (14/8/25): “ASIC sues Mercer Super alleging systemic failure to report member services investigations. One of Australia’s largest superannuation funds failed to tell ASIC about investigations into serious member services issues, including incorrect insurance premium refunds for dead members, the regulator alleges in new proceedings launched today in the Federal Court. ASIC alleges that between October 2021 and September 2024, Mercer Super had inadequate systems in place to comply with the reportable situations regime, which requires Australian financial services licensees to promptly report ongoing investigations into significant breaches of their core obligations. Examples of these systems failures include, ASIC alleges, Mercer Super failing to report seven investigations at all, and another investigation being reported more than a year late, including investigations into: 1) insurance premiums not being refunded correctly after members had died 2) member accounts not being created with default insurance, and 3) updates to member information not being processed by the trustee. ASIC also alleges Mercer Super provided false or misleading information in reports to ASIC, which understated the number of members who were impacted. ASIC Deputy Chair Sarah Court said the case against Mercer Super was the latest in a series of actions ASIC had taken to drive change in the way trustees serve their customers. Member services failures in the superannuation sector is one of ASIC’s 2025 enforcement priorities. Over the past 12 months, ASIC has sued AustralianSuper and Cbus over alleged failures in handling death benefit and insurance claims. ASIC has also issued 34 death benefit claims recommendations to super trustees and flagged its next phase of work focusing on how trustees respond to customer complaints. While ASIC is reviewing the reportable situation regime to make compliance simpler for licensees, Mercer Super’s alleged conduct falls well below what ASIC expects of a trustee of its size and market position. ASIC is seeking declarations and penalties from the Court. Background – Mercer Super is the seventh largest super fund in Australia with more than 950,000 members and $70 billion in assets under management. Separately, in August 2024, Mercer Super was fined $11.3 million after it admitted making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options. (24-173MR). One of ASIC’s 2025 enforcement priorities is focused on member services failures in the superannuation sector (24-252MR). Late last year, ASIC commenced Federal Court proceedings against United Super Pty Ltd (United Super), the trustee of Cbus, alleging systemic failures in death benefit and TPD insurance claims processing (24-251MR). Earlier this year, ASIC commenced Federal Court action against AustralianSuper Pty Ltd, the trustee of Australia’s largest superannuation fund, alleging delays in the processing of nearly 7,000 death benefit claims (25-034MR). In March 2025, ASIC handed down 34 recommendations to super trustees to improve the way they handle death benefit claims (25-049MR). In a speech in June 2025, ASIC Chair Joe Longo outlined the next phase of ASIC’s work in the superannuation sector will address how trustees learn from and respond to the complaints they receive.”
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