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:
- failure to update member accounts which led to higher fees and less favourable insurance policies applying to members
- failure to allocate $64 million in member funds in a timely manner, and
- failure to provide death and total and permanent disability insurance cover for eligible members.
ASIC Chair Sarah Court said the systemic deficiencies and conduct identified were inappropriate for a superannuation trustee of Mercer Super’s size and market position.
‘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.’
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.
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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).
Editor's note:
On 29 June 2026 an amended judgment was added to this media release.