More than half a million Aussies could get super boost after class action
More than half a million Australians could get a boost to their retirement savings after a class action secured a $249 million settlement from Commonwealth Bank (CBA) and two fund managers.
The class action was brought against CBA, Colonial First State Investments Limited (CFSIL), and Avanteos Investments Limited (AIL), alleging group members’ retirement savings were reduced through the payment of low interest rates on certain cash and deposit investments between 2008 and 2021.
Commonwealth Bank and two fund managers have settled a class action suit over allegations about improper management of superannuation funds. Louie Douvis
It alleged that the fund managers did not act in the best interests of members when they invested members’ retirement savings with their parent bank, CBA, without trying to obtain the best rates available and that, in total, members lost millions in aggregate retirement funding.
“If trustees do not fight for the best interest rate returns on cash and deposit investments, members can lose tens of thousands of dollars by the time they retire,” Nathan Rapoport from Slater and Gordon, which brought the class action, said.
“In superannuation, small differences add up.
“A few hundred dollars today, invested for many years in super, can compound into a much larger amount by the time people retire.
“Superannuation trustees must prioritise their members’ interests over their own.
“If any superannuation trustees might be at risk of forgetting the lessons from the Banking Royal Commission, the settlement in this case should serve as a reminder.”
Slater and Gordon said the settlement is subject to Federal Court approval.
The settlement was reached with the respondents without admission of liability.
CBA confirmed the in-principle agreement in a statement to the ASX last week.
“In agreeing to resolve the proceedings, CBA, CFSIL and AIL continue to deny the allegations and make no admission of liability or wrongdoing,” the statement read.
Lead applicant Wendy Gibson, who joined Colonial’s FirstChoice Wholesale Personal Super in 2005, invested in term deposits offered through the product between 2011 and 2019.
“I was dumbfounded when I first learnt of Colonial’s alleged conduct,” Gibson said.
“We must be prepared to stand up for what’s right against these big conglomerates.
“I’m glad that we persevered with this case and I’m relieved that it will finally conclude.”
Another applicant Peter Currie, who had money invested in cash account via Avanteos’ FirstWrap Plus Personal Super, said he hopes the big banks have “learnt their lesson”.
“I hope that group members are happy with this outcome and that this case has come to fruition.”
Members do not need to do anything to receive their share of the settlement which will most likely be paid into superannuation accounts once the settlement is court-approved.
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