Australia’s Federal Court has ordered United Super—trustee of the Construction and Building Unions Superannuation Fund (Cbus)—to pay A$23.5 million (US$15.17 million) for systemic failures in processing death and disability insurance claims, the Australian Securities and Investments Commission (ASIC) announced on Tuesday.
The breaches affected more than 7,000 claimants, with delays in handling death benefits and total and permanent disability (TPD) claims. Cbus admitted to the systemic failures and said it had already provisioned for the penalty and will not increase member administration fees to cover the cost.
The penalty comes on top of roughly A$32 million in compensation already paid to 7,402 members under the fund’s remediation program. Notably, the court-imposed penalty exceeds United Super’s A$18.5 million revenue in FY2024, reflecting the seriousness of the compliance failures.
ASIC’s Message: Accountability is Unavoidable
ASIC Deputy Chair Sarah Court said Cbus failed to act despite being aware of rising claim volumes and receiving direct complaints from members about significant delays.
A stark example: a widow waited 15 months for her late husband’s death benefit and only received action after speaking publicly on ABC radio.
Industry Implications
Analysts say the ruling underscores a clear industry warning.
“Outsourcing claims administration doesn’t outsource responsibility,”
— Tim Waterer, Chief Market Analyst, KCM Trade
Cbus added that it has resolved its dispute with MUFG Retirement Solutions (its administrator), which had been linked to the claims backlog.