Mercer Super fined $10.3 million for eight investigations it reported late or never at all

The Mercer Super outcome has been reported as a breach reporting failure, which makes it sound like paperwork. The judgment, Australian Securities and Investments Commission v Mercer Superannuation (Australia) Limited [2026] FCA 832, delivered by Justice Button on 26 June 2026, is specific about what was inside the reports that never arrived.

Mercer Superannuation (Australia) Limited is the trustee of the Mercer Super Trust. After members of the BT Super Fund transferred into the trust on 1 April 2023, it became the seventh largest superannuation fund in Australia by member numbers. As at 30 June 2025 it held approximately $79.8 billion in funds under management for approximately 1,062,008 members.

The Corporations Act requires a financial services licensee to tell ASIC within 30 days when it has reasonable grounds to believe a reportable situation has arisen. One category of reportable situation is an investigation into whether there has been a significant breach of a core obligation, once that investigation has run for more than 30 days.

Between 1 October 2021 and 30 September 2024, Mercer failed to report at least eight such investigations on time. In seven of those eight cases it never reported them at all. That produced 15 contraventions of sections 912DAA(1) and 912DAA(7). The court also declared that Mercer's systems for identifying, tracking and reporting these investigations were deficient across the whole period, contravening sections 912A(1)(a) and 912A(5A), the obligation to do all things necessary to ensure financial services are provided efficiently, honestly and fairly.

The court identified what those eight incidents concerned. They included a failure to update some member accounts, which left members paying higher fees and holding less favourable insurance arrangements, the charging of insurance premiums after a member had died, and a failure to provide death and total and permanent disability cover to members who were eligible for it. ASIC has also stated that the matters included approximately $64 million in member money that was not allocated on time.

A third set of contraventions concerns what Mercer did tell the regulator. On one investigation, three reports lodged with ASIC contained materially false or misleading statements. Asked in a report lodged on 27 October 2023 whether any clients had been affected, Mercer answered that this was not known. Its own governance database had recorded since 12 May 2023 that at least 231 members of one sub-plan were affected, had been remediated and had been sent an apology. A further report on 10 May 2024 put the number at approximately 50. A fourth report followed on 15 November 2024, and a fifth and final report on 30 April 2025. Those three reports produced three contraventions of section 1308(5).

The penalty was split at the court's own prompting. The parties initially proposed a single figure of $10,300,000. Justice Button asked for penalties to be attributed to each set of contraventions, and the final orders allocate $4,062,500 to the systems failure, $5,300,000 to the 15 reporting contraventions and $937,500 to the three false or misleading reports. Costs of $1,200,000 were agreed. The theoretical statutory maximum, given the number of contraventions, was $234 million, a figure the court noted was so high as not to be a useful measure. The case proceeded on a statement of agreed facts and admissions filed on 21 May 2026, and was heard on 3 June 2026.

One finding has consequences beyond Mercer. The court accepted that an investigation begins when steps are first taken to gather information about whether there has been a significant breach, not when a matter is formally referred to a committee. That is an earlier trigger than many licensees have assumed, and it is the point at which the 30 day clock starts running.

What is not known is how common this is. The reportable situations regime is self reporting: ASIC learns of an investigation because the licensee tells it. An investigation that is never reported is, by construction, invisible unless a regulator goes looking. ASIC found Mercer's through its own inquiries. No published figure exists for how many other trustees or licensees have investigations sitting unreported, and the regime provides no independent way to count them.