Australia Pension Fund Mercer Sued Over Customer Disclosures

Australia’s financial regulator is suing A$70 billion ($46 billion) pension fund Mercer Super, accusing it of failing to report multiple investigations into serious member services issues.

In a Federal Court filing, the Australian Securities and Investments Commission alleged between October 2021 and September 2024, Mercer Super failed to disclose seven investigations and reported another more than a year late. Among the matters under review was the incorrect refunding of insurance premiums after members had died, ASIC said, adding the fund also gave false or misleading information in reports to the regulator.

The lawsuit comes after a March ASIC report criticized leadership across the A$4.1 trillion pensions industry for fostering a culture of poor customer service, outlining 34 recommendations for reform. The regulator has also taken action against pension funds AustralianSuper and Cbus over alleged mishandlings of death benefits and insurance claims.

Mercer is cooperating with ASIC and reviewing the allegations, it said in a statement. The fund added that ASIC “has expressly stated” that Mercer didn’t set out to deliberately mislead the regulator about the matters. (Editor’s note: Marsh McLennan subsidiary, Mercer, manages the Mercer Super pension fund).

In Australia, financial services license holders are required to promptly report ongoing investigations into significant breaches of their core obligations. “We allege a pattern of longstanding and systemic failure by Mercer Super to comply with the law,” ASIC Deputy Chair Sarah Court said in a statement.

In a separate case last year, Mercer Super was fined A$11.3 million for greenwashing, the first court action by ASIC over the issue.

Photograph: An elderly couple in Carlton Gardens in Melbourne, Australia, on Friday, April 5, 2024. Photo credit: James Bugg/Bloomberg