Statewide Super penalty not to be paid by members
Statewide Super has announced that their recent $4 million penalty will not be paid by members and is less than the penalty sought by the Australian Securities and Investments Commission (ASIC).
In a decision handed down by the Federal Court on Tuesday, Statewide Super was found to have told at least 7,000 of its members they had insurance cover when they did not.
It also overcharged more than $2.5 million in insurance premiums to members who no longer held insurance as part of their super accounts.
Statewide Super told its members it cooperated with ASIC and in considering their best interests, chose not to contest the allegation having previously sought to reach agreement via an enforceable undertaking.
“The Federal Court recognised that Statewide Super self-reported the insurance administration error which led to this action, and did not intentionally provide any incorrect information to members in relation to their insurance status, nor intentionally charge incorrect insurance premiums,” it said.
“All affected members will be fully remediated, including the refund of any overpaid premiums and lost earnings, and all insurance entitlements will be honoured.
“In 2016, Statewide Super introduced a change to support the protection of the retirement benefits of inactive members with balances of less than $4,000 from being eroded by insurance premiums.
“The insurance administration error related primarily to the implementation of this change in the administration system. As a result, some members were given incorrect information regarding insurance and were wrongly charged insurance premiums.
“Statewide Super self-reported the insurance administration error to ASIC, conducted a forensic examination and developed a remediation plan.”
The industry super fund said the remediation process would be supported by external experts and would be finalised in the coming weeks.
AUTHOR
Liam Cormican
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
