A law firm says it has filed class action proceedings against Colonial First State alleging more than 100,000 super members lost money because the Commonwealth Bank-owned wealth manager was too slow to implement government reforms.
Maurice Blackburn says it has filed proceedings in Victoria’s Federal Court alleging that Colonial failed to move $3.2 billion of members’ money into a lower-cost, higher-performing MySuper product in a timely way, acting against the best interest of members and contravening superannuation law.
MySuper was introduced as part of superannuation reforms announced by the federal Labor government in 2011, creating a low-cost default super designed to make sure people with low balances weren’t charged excessive fees.
“MySuper was introduced to protect the retirement outcomes of Australians by ensuring that consumers weren’t losing money on unnecessary fees and products,” principal lawyer Miranda Nagy said.
“Colonial had a legal obligation over and above a basic moral obligation to move default member balances into MySuper at the time that best met their members’ needs, not their own.”
Maurice Blackburn said it filed the action against Colonial First State Investments Limited, the trustee of the Colonial First State FirstChoice Superannuation Trust, and former Colonial former executive director Linda Elkins.
“The contraventions at the heart of this case resulted in members in FirstChoice Employer Super paying higher fees and receiving a lower investment return for an extended period of time, when they could have been in Colonial’s cheaper, better-performing MySuper product earlier,” Ms Nagy said.
“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’, as minister (Bill) Shorten said at the time.”
The class action is the latest legal hit for Commonwealth Bank.
Commonwealth Bank and Colonial First State were hit by a class action law suit last year over allegedly uncompetitive superannuation returns, while CBA’s CommInsure life insurance unit was this month charged with 87 counts of unlawfully selling life insurance policies over the phone.
And Maurice Blackburn is already running a shareholder class action related to the share price fall related to AUSTRAC’s money-laundering allegations against CBA, which resulted in the largest civil penalty in Australian corporate history.