(Reuters) -Australia’s Federal Court has ordered superannuation fund Cbus to pay an A$23.5 million ($15.17 million) penalty for serious failures in processing death and disability insurance claims, the country’s corporate regulator said on Tuesday.
The penalty was imposed against United Super Pty, the trustee of Cbus, after the fund admitted that systemic faults caused long delays in handling death benefits and total and permanent disability claims, said the Australian Securities and Investments Commission (ASIC).
The delays affected more than 7,000 members and claimants, according to ASIC.
Australia’s prudential regulator said in February that it would probe Construction and Building Unions Superannuation Fund (Cbus) over possible breaches of the superannuation industry law, with a focus on its expenditure management.
The penalty on Tuesday lands on top of about A$32 million in compensation already paid to the estimated 7,402 affected claimants and members under the fund’s remediation programme, and exceeded United Super’s A$18.5 million revenue in fiscal 2024, underscoring the seriousness of the breaches.
“Not only was Cbus aware of increased insurance claim volumes, but it was also put on notice by its own customers who were complaining about the long delays they were enduring,” ASIC Deputy Chair Sarah Court said.
In one case, a widow told ABC radio in June 2023 that she had been waiting 15 months for her late husband’s death benefit. Cbus only opened an investigation and ultimately lodged a breach report with ASIC after she went public about the delays and poor communication.
Cbus did not immediately respond to a Reuters request for comment.
($1 = 1.5494 Australian dollars)
(Reporting by Rishav Chatterjee in Bengaluru; Editing by Mrigank Dhaniwala and Rashmi Aich)
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