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Bank-owned super funds face new legal threat

AAP  |  11 Sep 2018Text size  Decrease  Increase  |  
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Slater and Gordon

Slater and Gordon launch class against Aussie banks [Source: Slater and Gordon]

Bank-owned superannuation funds face the threat of class actions on the back of evidence from the banking royal commission.

Millions of Australians are being invited by law firm Slater and Gordon to sign up to the Get Your Super Back claim, which will involve a series of class actions, most likely starting with Commonwealth Bank-owned superannuation fund, Colonial First State and AMP.

"The banking royal commission exposed appalling behaviour by the bank-owned super funds who may have stripped money from the retirement savings of millions of hard working Australians," head of class actions for Slater and Gordon, Ben Hardwick, told reporters.

"We're happy the royal commission has exposed these dodgy practices but we don't believe exposure is good enough, we don't think it's fair that Australians retirement savings may have been gauged and today we are saying enough is enough," he said.

It will be alleged that Colonial First State "dumped" super with its parent bank, which had "ludicrously low" interest rates, below even the Reserve Bank of Australia's cash rate.

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Mr Hardwick said the royal commission also revealed some AMP customers were getting negative returns on their funds.

"We don't believe there is any justification for a bank-owned fund member being worse off than an industry fund member, especially when they have chosen to invest in a passive cash investment option, which requires the fund to do basically nothing," Mr Hardwick said.

In response to Slater and Gordon's announcement, AMP encouraged direct contact from customers and said the potential action related to issues previously identified and reported to the regulator.

"We have reduced the administration fees on some of our cash investment options to address the issue of negative returns in the small number of funds impacted by this issue. We are also compensating affected customers for lost earnings," the AMP statement reads.

"In July, we also announced that we are cutting fees on our flagship MySuper products, benefiting around 700,000 existing customers as well as new customers, improving member outcomes."

In a statement, Commonwealth said it was aware of the announcement but it and its subsidiaries have not been served with any legal proceedings.

"CBA will keep the market informed of developments," it said.

Would-be claimants can register through the law firm's website getyoursuperback.com, but the action will take weeks to months to lodge and the class actions themselves could take years to resolve.


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