In Australian Securities and Investments Commission v Mercer Superannuation (Australia) Limited [2026] FCA 832, the Federal Court of Australia ordered Mercer Super to pay penalties totalling $10.3 million for systemic failures to report investigations into significant member services issues to ASIC, including an investigation into insurance premiums continuing to be charged after members had died, and only refunded later.
The penalties related to :
(a) $4,062,500 in respect of Mercer Super’s contravention of sections 912A(1)(a) and 912A(5A) of the Corporations Act (failure to provide services efficiently, honestly and fairly) ;
(b) $5,300,000 in respect of Mercer Super’s 15 contraventions of sections 912DAA(1) and 912DAA(7) relating to failures to report investigations; and
(c) $937,500 in respect of Mercer Super’s three contraventions of section 1308(5) relating to reporting materially false or misleading information.
Mercer Super was also ordered to pay ASIC’s costs in the agreed amount of $1,200,000.
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 and breached sections 912DAA(1) and 912DAA(7) of the Corporations Act.
The Court also found that Mercer Super failed to report seven reportable investigations to ASIC at all and it reported another investigation late. In relation to the investigation that was reported late to ASIC, the Court found that Mercer Super breached section 1308(5) by failing to take all reasonable steps to ensure the reports to ASIC were accurate and provided false or misleading information which understated the number of members impacted by the incident being investigated.
The investigations that Mercer Super either failed to report on time or did not report at all included investigations concerning:
* failure to update member accounts which led to higher fees and less favourable insurance policies applying to members
failure to allocate $64 million in member funds in a timely manner, and
* failure to provide death and total and permanent disability insurance cover for eligible members.
The Court declared that Mercer Super consequently contravened sections 912A(1)(a) and 912A(5A) of the Corporations Act by failing to do all things necessary to ensure the financial services covered by its AFSL were provided efficiently, honestly and fairly.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
