Retirement
Big 4 caught up in super class action strife
Thousands of Australian super fund members could soon have access to remediation, with a new class action alleging they’ve been shortchanged by the subsidiaries supposed to act in their best interests.
Big 4 caught up in super class action strife
Thousands of Australian super fund members could soon have access to remediation, with a new class action alleging they’ve been shortchanged by the subsidiaries supposed to act in their best interests.
Slater and Gordon has filed the class action in the Federal Court of Australia against Westpac subsidiaries BT Funds Management Ltd and Westpac Life Insurance Services Ltd, which alleged that thousands of its superannuation members have been shortchanged by the bank’s funds through no provision of valuable service.
In a statement, the plaintiff law firm said this is the third class action to be filed as part of Slater and Gordon’s “Get Your Super Back” campaign launched off the back of the 2018 royal commission.
The case alleges that BT Funds Management has been shortchanging members who invested in the BT Super for Life cash-only option by investing through Westpac Life and allowing it to earn substantial fees for providing no valuable service.
It was reported that rather than investing member funds directly, BT chose to use Westpac Life as an intermediary, who then invested the money in an externally managed cash fund.
The damages being sought are as of yet unspecified, according to an ASX statement from Westpac.
Both BT Funds Management and Westpac Life Insurance Services have said they would be defending the claims.
Special counsel at Slater and Gordon, Nathan Rapoport, said Westpac Life was given “complete discretion” about the interest rates that it would pass on to members, and at times kept almost half of the returns on members’ money for itself.
Mr Rapoport said this has resulted in members losing out on potentially thousands of dollars over a number of years.
He outlined that the class action alleges that BT had breached its duty to act in the best interests of its members, and that Westpac Life was involved in this breach.
“Superannuation members trusted BT with their retirement savings, but instead of seeking the best returns available for members, it appears BT chose to line the pockets of another entity in the Westpac group at the expense of its members,” the lawyer commented.
“In recent years, Westpac Life actually achieved reasonable returns on members’ money, but the arrangement meant that it kept much of that benefit for itself,” he added.
According to Mr Rapoport, in one year, Westpac Life earned returns of around 2.5 per cent, but it delivered an interest rate of only 1.3 per cent to members.
“We believe Westpac Life provided no service that could justify it retaining such a large part of the returns generated from members’ money, and we want the difference paid back to members,” he continued.
It comes after ASIC commissioner John Price’s comments earlier this week that the current costs of remediation for misconduct in the financial system amounts to $9 billion.
Westpac recently had to fend off a civil case from ASIC with regard to its responsible lending practices and obligations.
The new class action also follows the announcement in July that William Roberts Lawyers would be moving forward with a class action against Suncorp Super.
RELATED ARTICLES
About the author
About the author
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
AMP launches national campaign to boost super engagement
AMP has unveiled a new national advertising campaign aimed at encouraging Australians to engage more actively with their superannuation. Read more
Superannuation
AustralianSuper urges action on gender pay gap for Equal Pay Day
AustralianSuper, Australia's largest superannuation fund, is calling for increased focus on the gender pay gap and its long-term impacts on women's retirement savings this Equal Pay Day, August 19. Read more
Superannuation
AMP advisers focus on super contributions and home ownership queries
Financial advisers are prioritizing assistance with superannuation contributions, transfer balance caps, death benefits, and home ownership issues, according to recent data from AMP Advice. Read more
Superannuation
Aware Super reports strong 11.02% return for flagship investment option
Aware Super, one of Australia's largest superannuation funds, has announced an 11.02% return for its High Growth accumulation option in the 2024 financial year. Read more
Superannuation
Retirement savings strategies: How to boost your superannuation
Superannuation is a pivotal part of retirement planning in Australia, offering a tax-effective way to save for your later years. As you navigate through your working life, enhancing your ...Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
AMP launches national campaign to boost super engagement
AMP has unveiled a new national advertising campaign aimed at encouraging Australians to engage more actively with their superannuation. Read more
Superannuation
AustralianSuper urges action on gender pay gap for Equal Pay Day
AustralianSuper, Australia's largest superannuation fund, is calling for increased focus on the gender pay gap and its long-term impacts on women's retirement savings this Equal Pay Day, August 19. Read more
Superannuation
AMP advisers focus on super contributions and home ownership queries
Financial advisers are prioritizing assistance with superannuation contributions, transfer balance caps, death benefits, and home ownership issues, according to recent data from AMP Advice. Read more
Superannuation
Aware Super reports strong 11.02% return for flagship investment option
Aware Super, one of Australia's largest superannuation funds, has announced an 11.02% return for its High Growth accumulation option in the 2024 financial year. Read more
Superannuation
Retirement savings strategies: How to boost your superannuation
Superannuation is a pivotal part of retirement planning in Australia, offering a tax-effective way to save for your later years. As you navigate through your working life, enhancing your ...Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
