ASIC’s Longo denies superannuation double | Australian Markets

The Australian Securities and Investments Fee chair, Joe Longo has denied the regulator is guilty of double requirements when coping with industry and retail superannuation funds.

On the identical day during which ASIC introduced it was pursuing AustralianSuper within the Federal Courtroom over death benefit claims handling shortcomings, Longo stated “ASIC’s approach to penalties for misconduct is the same regardless of whether the fund is an industry or retail fund”.

“The legal principles are well-established. The primary purpose of civil pecuniary penalties is to deter future misconduct. If a super fund profits by breaking the law, ASIC will seek penalties that are sufficiently high to deter it and others from engaging in similar conduct, regardless of the structure of the super fund,” he stated.

“That’s why Aware Super was fined $20 million for charging fees for no service, Westpac/BT was fined $20 million for incorrectly charging insurance commissions to members, Colonial First State was fined $20 million for misleading members, and AustralianSuper was fined $27 million – the second-highest penalty to a super fund in the last five years – for failing to merge multiple superannuation accounts,” he informed a Sydney convention.

Longo emphasised that the situations all pointed to the need for superannuation fund trustees to know and perceive their business.

“All of these are examples of not knowing your business. Not taking the time to be ‘plugged in’ and connected. At the heart of this issue is leadership that doesn’t have a grip on the fund’s data, systems and processes – and the customers who suffer for it,” he stated.

“This sort of disconnect is unacceptable in any space of company Australia. However within the superannuation sector it’s significantly severe, as a result of tremendous actually impacts everybody.

“And as custodians of nearly $3 trillion in hard-earned savings, APRA-regulated superannuation funds and their trustees have a clear responsibility to put members – better thought of as their customers – front and centre,” Longo stated.

“Let me put it plainly: The governance challenges facing this sector relate to the foundational duties and expectations of directors,” he stated.

“We’re not talking about anything new here – we are talking about well-established principles of governance and responsibility. Which is why, when I say that some super trustees are failing Australians in a critical service, it should be a warning to all directors not to let their fundamental duties slip.”

“We will have more to say in a new report on superannuation member services in coming weeks, but the industry is the current poster child for what can and does go wrong when governance fails.”