Australian Securities & Investments Commission secures AUD 10.3 million Mercer Super penalty over systemic reportable situations failures

The Australian Securities & Investments Commission said the Federal Court ordered Mercer Super to pay AUD 10.3 million in penalties for systemic failures to report investigations into significant member service issues under the Corporations Act reportable situations regime. The Court found Mercer Super’s compliance systems were inadequate between October 2021 and September 2024, undermining a regime that requires Australian financial services licensees to promptly notify ASIC of investigations into potentially significant breaches of core obligations. The Court found Mercer Super failed to report seven reportable investigations and reported another one late. In the late-reported matter, Mercer Super also failed to take all reasonable steps to ensure the report was accurate and provided false or misleading information that understated the number of affected members. The missed or delayed investigations included insurance premiums continuing to be charged after members had died and only refunded later, failures to update member accounts that led to higher fees and less favourable insurance terms, delays in allocating AUD 64 million in member funds, and failures to provide death and total and permanent disability insurance cover for eligible members. Justice Button found ASIC’s supervisory role had been seriously compromised by the duration of the unreported investigations and that Mercer Super was already on notice that its compliance systems were not adequate. ASIC linked the case to its broader focus on lifting standards in the superannuation sector. Holding super trustees to account for member service failures is one of ASIC’s 2026 enforcement priorities.