Yahoo Finance $56m to go to 100,000 Aussies in MAJOR super fund settlement
Colonial First State will pay 100,000 super members a total of $56.3 million after a class action against the super fund was settled.
Thousands of the fund’s members alleged it had been slow to transfer them to MySuper products, leaving them “languishing in high-fee accounts, bearing the cost of commissions to financial planners, and receiving lower investment returns”.
MySuper laws came into force in 2012 to ensure the default super option employers put employees into charged low fees and had simple features so customers didn’t end up paying for unnecessary services.
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“The whole point of the MySuper reforms was to make sure that millions of everyday Australians who hadn’t made an active decision about their super, were not ‘getting charged for valet parking when they were taking the train”, said then-minister for superannuation Bill Shorten at the time.
The claim’s lead applicant, Lesley Coatman, was a street-sweeper driver who retired with less than $35,000 in superannuation.
Class action firm Maurice Blackburn Lawyers reached the $56.3 million settlement on behalf of its clients after filing the class action in 2019.
According to Miranda Nagy, principal lawyer at Maurice Blackburn, Colonial First State allegedly failed to transition $3.2 billion of accrued default amounts (ADAs) over to the MySuper product “in a timely way”.
“As the High Court has recognised, superannuation is often the greatest asset Australians have,” Nagy said.
“It is deferred pay and it is critical to a dignified retirement. Fund members are entitled to expect that superannuation trustees put their interests first.”
Nagy said the case was the first settlement of a super class action since the financial services royal commission “shone a light on the conduct of retail super fund trustees”.
“We are very pleased to have secured a settlement that will see fund members’ accounts augmented to the tune of millions, and their retirement incomes protected,” she said.
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