ASIC fines industry fund for misleading insurance notices

The regulator has fined the super fund over false insurance notices, urging super trustees to strengthen systems and avoid errors that erode retirement balances.

ASIC has issued two infringement notices totalling $37,560 to superannuation trustee Retail Employees Superannuation Pty Ltd (Rest) for alleged false or misleading representations made after the fund inadvertently activated insurance cover for more than 2,000 members.

Between June 2024 and January 2025, Rest sent annual statements and emails to affected members indicating that they held active death, total and permanent disability, and/or income protection insurance.

However, each of the members had either cancelled, chosen not to receive, lost, or otherwise not held insurance cover in the fund.

ASIC has alleged that in sending the statements and emails, Rest made false or misleading representations that it had a right to activate insurance cover and deduct premiums from the accounts of members, when it had no such right.

Rest paid the infringement notices on 22 September 2025.

Addressing member services failures in the superannuation sector has been identified as a 2025 enforcement priority, while improving retirement outcomes, and member services has been a 2024–25 strategic priority, the regulator stated.

ASIC said it seeks to strengthen public confidence in the superannuation industry by encouraging trustees such as Rest to maintain adequate systems to prevent administrative errors that erode retirement balances and to act quickly when errors occur, in order to avoid misleading members.

In response, Rest said: “Rest members rightly expect the highest level of service, and the experience of the impacted members clearly fell short of these expectations in this instance.

“We are deeply sorry to these members for any inconvenience caused, and that our initial communications with respect to their insurance cover were not as clear as they should have been.

“We have reviewed our member communications to make them clearer and to align with the expectations of our members and ASIC. We have co-operated with ASIC and have taken appropriate action to address their concerns.”

Rest is the trustee of Rest Super, an industry fund with more than 2 million member accounts. 

ASIC has also directed consumers with questions about insurance in superannuation to its Moneysmart website, which provides independent information about how insurance works within super and when cover is provided.

The Protecting Your Superannuation (PYS) and Putting Members’ Interests First (PMIF) reforms, introduced in 2019 and 2020, were designed to prevent erosion of retirement savings by limiting default insurance in certain cases.

Members under 25, with balances under $6,000, or with inactive accounts are not automatically provided with insurance cover unless they elect in writing to take it up. Members also have the right to cancel insurance held through their super accounts.