Australian pension fund Cbus fined over $15 million for delays in death
Australia’s Federal Court has imposed a A$23.5 million (US$15.17 million) penalty on the superannuation fund Cbus for serious failures in processing death and disability insurance claims, the country’s corporate regulator announced on Tuesday.
The penalty targets United Super Pty, the trustee of Cbus, after the fund admitted that systemic issues caused significant delays in handling both death benefits and total and permanent disability (TPD) claims, according to the Australian Securities and Investments Commission (ASIC), News.Az reports, citing Reuters.
Regulators said the delays affected more than 7,000 members and claimants, marking one of the sector’s more serious administrative failings in recent years.
The ruling follows an earlier probe launched in February by Australia’s prudential regulator into potential breaches of superannuation industry laws, including concerns about expenditure management within the Construction and Building Unions Superannuation Fund (Cbus).
Tuesday’s penalty comes in addition to around A$32 million in compensation already paid to 7,402 affected members under Cbus’ remediation programme. The fine also exceeds United Super’s A$18.5 million revenue for fiscal year 2024, underlining the gravity of the misconduct.
ASIC Deputy Chair Sarah Court criticised the fund for ignoring rising claim volumes and customer complaints.
“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,” she said.
One case that drew public attention involved a widow who told ABC radio in June 2023 that she had waited 15 months for her late husband’s death benefit. Cbus launched an investigation and later filed a breach report with ASIC only after the issue gained media attention.
Cbus has not yet responded to Reuters’ request for comment.
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