Superannuation giant Cbus fined has agreed to pay $23.5 million after admitting to systemic failures that left thousands of grieving families and injured workers waiting over a year for critical insurance payouts.
The Construction and Building Unions Superannuation Fund (Cbus), which manages over $100 billion for more than 920,000 members, has reached a settlement with corporate regulator ASIC following allegations of “absolutely horrific” delays in its handling of insurance claims.
The penalty marks one of the largest fines ever imposed on an Australian superannuation fund for member service failures.
More Than 10,000 Members Left in Limbo
Between September 2022 and November 2024, Cbus systematically failed to process death benefit and total permanent disability (TPD) insurance claims within acceptable timeframes. ASIC alleged that more than 10,000 members and claimants were impacted by excessive delays.
The most shocking detail: around 6,000 people waited longer than 12 months for their claims to be resolved. These weren’t just numbers on a spreadsheet. They were construction workers who suffered catastrophic injuries, or families who lost breadwinners and desperately needed financial support.
Cbus itself estimated the financial loss to members at approximately $20 million. That figure doesn’t capture the emotional toll of families unable to pay mortgages, medical bills piling up, or children’s education plans derailed while bureaucratic processes dragged on.
Construction and Building Unions Superannuation Fund (Cbus)
How Did This Happen?
The problems began when Cbus engaged third-party administrator Australian Administration Services (AAS) in 2021 to handle insurance claims processing. Despite receiving regular reports highlighting processing delays, United Super Pty Ltd (Cbus’s trustee) failed to adequately assess or address the scale of the crisis.
ASIC Deputy Chair Sarah Court didn’t mince words when announcing the legal action in November 2024:
“We allege Cbus failed its members and claimants at their most vulnerable time. Delays in claims processing cause real harm to families who may be relying on payments to meet critical expenses.”
The regulator accused Cbus of multiple breaches:
- Failing to act efficiently, honestly and fairly in handling member claims
- Not reporting the situation to ASIC within the required 30-day timeframe
- Submitting misleading reports that downplayed ongoing problems
CEO Admits Members Faced “Absolutely Horrific” Experience
Cbus CEO Kristian Fok publicly acknowledged the failures in July 2025, describing members’ experiences as “absolutely horrific.”
“What we experienced was absolutely horrific in terms of the experience that our members received at a time when they absolutely needed us,” Fok told the Investment Magazine Insurance in Super Summit.
He admitted the scale of the problem wasn’t immediately visible when he took over as CEO. But once the issues came to light, the significance became “pretty apparent.”
The fund has since established a compensation program for affected members, though Fok conceded that compensation isn’t “necessarily reflective of the distress that some of the families and individuals did go through.”
Why Cbus Members Are Particularly Vulnerable
Building and construction remains one of Australia’s most dangerous industries. It ranks third highest for workplace fatalities, with workers regularly facing risks from working at heights, heavy machinery, and hazardous materials including silica.
Cbus has long marketed itself as providing insurance tailored to high-risk professions. The fund pays out hundreds of millions annually in insurance claims. In the 2024/2025 financial year alone, Cbus accepted 4,027 claims and paid $427.5 million in benefits.
But as Super Consumers Australia advocacy manager Susan Quinn pointed out: “In its marketing material Cbus says its insurance is tailored to meet the high-risk working conditions of people working in construction and allied industries, yet ASIC alleges that an extraordinary 50% of payments were delayed by more than 12 months. Their words and actions are completely out of whack.”
Broader Industry Concerns
The Cbus case isn’t isolated. Complaints to the Australian Financial Complaints Authority (AFCA) about superannuation fund claim delays more than doubled between 2022 and 2023. Complaints about death benefit processing tripled during the same period.
ASIC’s Sarah Court warned that claims handling remains a “broader issue” in the superannuation industry, hinting that further regulatory action against other funds could follow.
The federal government has responded by announcing new mandatory member service standards for the superannuation sector, with particular focus on insurance claims processing times.
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What Happens Next?
The $23.5 million penalty agreed by Cbus comes after the fund admitted liability. The trustee has committed to engaging independent experts to review governance, risk management and insurance administration processes.
The Australian Prudential Regulation Authority (APRA) has also accepted a court-enforceable undertaking from Cbus to implement a comprehensive risk transformation program.
For affected members, compensation payments are being processed. Anyone who experienced delays in insurance claims processing between September 2022 and November 2024 should contact Cbus directly on 1300 722 152.
The case serves as a stark reminder that superannuation funds must prioritise member services just as much as investment performance. When workers are injured or families lose loved ones, they need support immediately—not 12 months later.
