AustralianSuper to refund $70 million after overcharging 100,000 people

“Superannuation funds are trusted with the retirement savings of the nation. They must be held to a high standard to act in the best financial interests of their members.”

AustralianSuper said it would not need to increase fees to cover the compensation because the amount would be paid from its financial reserve for operational risk.

The fund, which manages almost $290 billion and has 3.1 million members, said it had also improved its processes for managing multiple accounts held by the same member.

In recent years, regulators have been pushing the superannuation sector to improve member returns, and a 2018 Productivity Commission review estimated about 10 million accounts were unintended multiple accounts that were being eroded by fees.

Meanwhile, figures published this week by SuperRatings suggested that on average, super funds were on track to make returns marginally ahead of inflation this financial year, which would fall short of most funds’ objectives. SuperRatings said the median balanced fund had made 1.2 per cent in April, helped by sharemarket returns.

SuperRatings executive director Kirby Rappell said high inflation was a challenge for super funds, even though it so far had been a stronger financial year than last year.

“The strong financial year-to-date return will be welcome news for members after last year’s losses as well as some bumpy months at the start of this financial year,” Rappell said.

“Put simply, super funds are on track to return around 8 per cent thus far this financial year, despite this also being behind an objective of inflation plus 3 per cent.”

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