Why has Mercer Super been ordered to pay $10.3 million in penalties?

Mercer Super has been ordered to pay $10.3 million because the Federal Court found it had systemic failures in complying with the reportable situations regime, including not reporting seven investigations at all, reporting one investigation late and providing inaccurate information that understated the number of affected members.

What kinds of member service issues did Mercer Super fail to report properly to ASIC?

The issues included failing to update member accounts, which led to higher fees and less favourable insurance policies; failing to allocate $64 million in member funds in a timely way; and failing to provide death and total and permanent disability insurance cover for eligible members, all of which should have triggered timely, accurate reports to ASIC.

How does the reportable situations regime apply to Mercer Super and other super trustees?

The reportable situations regime requires Australian financial services licensees, including super trustees such as Mercer Super, to promptly notify ASIC of investigations into potentially significant breaches of their core obligations so that ASIC can monitor misconduct risks and ensure that licensees prioritise investigations and remediation for affected members.

What did the Court say about the impact of Mercer Super’s reporting failures on ASIC’s oversight?

Justice Button found that ASIC’s supervisory role had been “seriously compromised” given the duration of the investigations that Mercer Super did not report, and noted the trustee was on notice that its systems were not adequate and that there was a risk investigations were not being identified or reported as required under the law.

How does the Mercer Super case fit into ASIC’s broader enforcement focus in superannuation?

ASIC has identified holding super trustees to account for member services failures as a 2026 enforcement priority and has recently secured penalties against Cbus for death benefit and insurance claim processing failures, taken action over Telstra Super’s dispute resolution delays and commenced proceedings against AustralianSuper, alongside issuing industry‑wide recommendations on handling death benefit claims.

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ASIC secures $10.3m penalty against Mercer Super over reporting failures

Written by Isaac FrancisPublished Jun 29, 2026, 4:09 AM

ASIC has obtained Federal Court penalties totalling $10.3 million against Mercer Super for systemic failures in breach reporting
The Court found Mercer Super did not properly report or accurately disclose several investigations affecting fees, insurance cover and benefit processing
ASIC says the case is part of its 2026 enforcement focus on holding super trustees to account for member service failures and transparency lapses

Mercer Super, one of Australia’s largest super funds with about $80 billion in assets and more than one million members, has been ordered by the Federal Court to pay $10.3 million in penalties for systemic failures to report investigations into serious member service issues to ASIC.

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, undermining a framework designed to give ASIC early visibility of potential misconduct and prompt remediation.

“These failures undermined a critical safeguard designed to protect consumers and exposed fundamental weaknesses in Mercer Super’s systems and processes,” said ASIC Chair Sarah Court.

Mercer Super failed to report seven reportable investigations at all and reported another investigation late, with that late report also found to contain false or misleading information that understated how many members were impacted by the incident being investigated.

The unreported or late‑reported investigations included issues such as member accounts not being updated, leading to higher fees and less favourable insurance terms, delays in allocating $64 million in member funds, and failures to provide death and total and permanent disability cover for eligible members.

ASIC has highlighted that Justice Button found its supervisory role had been “seriously compromised” by Mercer Super’s non‑reporting over several years, and that Mercer Super was on notice its compliance systems were inadequate and that investigations were not being reliably identified and reported.

Mercer Super was separately fined $11.3 million in August 2024 over misleading “sustainable” investment claims, and ASIC says the new penalty sits within a wider program to lift superannuation trustee standards, which has recently seen a $23.5 million penalty for Cbus, a pending penalty hearing for Telstra Super, and ongoing Federal Court action against AustralianSuper over death benefit claim delays.