The Federal Court has ordered Mercer Super to pay $10.3 million in penalties for failing to tell the corporate regulator about its internal investigations into significant issues.

One probe was launched when insurance premiums continued to be charged after members had died.

Mercer also neglected to tell the Australian Securities and Investments Commission about failures to update member accounts, leading to less favourable insurance policies, and failure to provide death and total and permanent disability cover to eligible members.

“This was not an isolated oversight. It was a sustained systemic issue that continued for years after the [disclosure] regime was introduced, which is unacceptable for a fund entrusted with $80 billion worth of retirement savings for more than 1 million members,” ASIC chair Sarah Court said.

“Accurate and timely reporting is not optional and when a fund falls short, we will take action.” 

Australian financial services licensees must promptly notify ASIC of investigations into potentially significant breaches of their core obligations.

The court found Mercer’s systems for complying with the Corporations Act’s reportable situations regime were inadequate between October 2021 and September 2024.

When detailing one investigation that was eventually reported to ASIC, Mercer provided false or misleading information that understated the number of members affected.

It failed to report seven other investigations to ASIC.

Mercer is the seventh-largest super fund in Australia. It was fined $11.3 million in 2024 after it admitted making misleading statements about the sustainable nature of some investment options.