The Australian Securities & Investments Commission (ASIC) announced that the Federal Court has ordered United Super Pty Ltd, trustee of the Construction and Building Unions Superannuation Fund (Cbus), to pay an AUD 23.5 million penalty for systemic failures that led to unreasonable delays in processing death benefits and insurance claims, impacting more than 7,000 members and claimants. The Court declared contraventions of the Corporations Act for failing to do all things necessary to ensure death, terminal illness and total and permanent disability (TPD) claims were handled efficiently, honestly and fairly, including by not taking reasonable steps to process claims within a reasonable time, holding inaccurate or incomplete data on claim volumes and age, failing to ensure sufficient committee oversight, and inadequately monitoring outsourced administrator Australian Administration Service Pty Limited. Between 27 March and 1 May 2023, 48% to 56% of open death claims (438 to 479) and 38% to 43% of open TPD claims (391 to 409) had been open for more than 365 days. Further contraventions related to late breach reporting, where reports due on 3 March 2023 and 20 July 2023 were not provided to ASIC until 5 August 2023; the Court also noted United Super’s responsibility for outsourced claims handling despite awareness from at least November 2022 of service-level failures. The penalty exceeds the AUD 18.5 million in revenue United Super declared for the 2024 financial year and sits alongside Cbus’s remediation program of about AUD 32 million for an estimated 7,402 affected members and claimants, plus orders to pay AUD 500,000 towards ASIC’s legal costs and undertake a compliance program requiring expert reports on whether systems and processes are now appropriate.

Original source View in tracker