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Mercer Superannuation (Australia) has been ordered to pay $10.3 million in penalties by the Federal Court for systemic failures to report investigations into significant member services issues to the Australian Securities and Investments Commission (ASIC) over a three-year period.
The penalty relates to 60 admitted contraventions of the reportable situations regime, which requires superannuation trustees to notify ASIC of investigations into significant breaches of financial services laws within 30 days.
Mercer Super failed to lodge reports on time across a span of conduct stretching from October 2021 to September 2024.
The underlying investigations Mercer Super failed to report to ASIC included insurance premiums being charged to accounts of members who had died, a failure to allocate $64 million in member funds in a timely manner, and failures to provide insurance cover to eligible members.
In handing down the decision, Justice Button found that ASIC’s supervisory role had been seriously compromised given the duration of the investigations that Mercer Super failed to report.
Her Honour also found that Mercer Super was on notice that its compliance systems were not adequate and of the risk that investigations were not being identified and reported to ASIC as required.
The reportable situations regime is intended to give ASIC early visibility of misconduct, ensure licensees prioritise investigations and remediation, and strengthen transparency across the financial services sector.
ASIC chair Sarah Court says the failures had been inappropriate for a superannuation trustee of Mercer Super’s size and market position.
Mercer Super is the seventh largest super fund in Australia by members with over one million members and almost $80 billion in assets under management.
"These failures undermined a critical safeguard designed to protect consumers and exposed fundamental weaknesses in Mercer Super’s systems and processes," says Court.
"This was not an isolated oversight. It was a sustained systemic issue that continued for years after the regime was introduced, which is unacceptable for a fund entrusted with $80 billion worth of retirement savings for more than a million members.
‘"When investigations into serious member service issues are not reported to ASIC as required by law, this can allow problems impacting members to persist unchecked, increasing the risk of ongoing harm.
"The court's decision sends a strong message to the superannuation sector that accurate and timely reporting is not optional and when a fund falls short, we will take action."
The penalty is the second major fine imposed on Mercer Super in two years after the Federal Court in 2024 ordered Mercer to pay $11.3 million following ASIC's first greenwashing case found the fund had made misleading statements about the environmental, social and governance credentials of some of its investment options.
When ASIC initially filed the reportable situations proceedings in August 2025, Mercer Super said it had cooperated with the regulator and noted ASIC had not alleged the fund deliberately misled anyone.
The case forms part of a broader ASIC enforcement campaign targeting governance and member protection failures across the superannuation sector.
In November 2025, construction industry fund Cbus was ordered to pay a $23.5 million penalty for serious failures in processing members' death benefits and insurance claims, with delays affecting more than 10,000 members.
In May this year, the Federal Court found Telstra Super had failed to comply with internal dispute resolution requirements.
ASIC also has ongoing Federal Court proceedings against AustralianSuper.
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