How will Slater and Gordon get my money back from the banks?
We have commenced five class actions against the big bank-owned super funds who we think may be liable for misconduct. Millions of Australians will potentially be eligible to join these class actions and get their money back.
Some class actions will focus on excessive fees and look to claw back the difference between the fees charged and what a fund acting in the best interests of members would have charged. Others will look at 'super cash rip-offs' where fund members have received uncompetitive interest rates on their cash investments.
Slater and Gordon have already launched five class actions as part of our Get Your Super Back campaign, against Colonial First State, AMP and BT and Westpac Life. The first class action alleges that Colonial First State invested cash in cash-only investment options with the Commonwealth Bank of Australia, at interest rates below the rates available from other banks. The second class action alleges that AMP paid too much to related AMP entities for administration services, resulting in excessive fees on members’ superannuation accounts. The third class action alleges that BT Super has been shortchanging the members of its BT Super For Life cash-only option, resulting in members losing potentially thousands of dollars from their retirement savings.
What is a ‘super cash rip-off’?
When you hand over your wages to a superannuation fund, there are many different ways that they can invest it. The safest and most conservative approach is cash. With a cash investment, your money is not invested in the market; it's just invested in a bank account where it collects interest.
When your super fund invests your money in cash, it doesn't have to do anything. It just takes your money and puts it in a bank. If your super fund is owned by a big bank, they will usually put your money into that parent bank. However, the fund has a legal duty to get you the best possible interest rate.
What funds like Colonial First State have been doing is dumping super with a parent bank, such as the Commonwealth Bank, despite it not offering the best returns for members. The interest rate from the parent bank has in some cases been as low as 1.25% per year.
This rate is ludicrously low. Standard bank interest rates should be around 2.0 to 2.5 per cent. That's what most banks offer to customers for term deposits. We are determined to hold bank-owned super funds to account for failing to obtain the best possible interest rate for cash investments - instead, opting for the one on offer from a parent bank.
Are you paying too much in fees?
Super funds charge a multitude of fees in connection with administration and management of the investments.
The Productivity Commission has shown that high fees generally generate lower net returns. That’s why the Get Your Super Campaign is focused on uncompetitive fees charged by retail and bank-owned super funds.
The Get Your Super Back Campaign will allege that these super funds were charging fees much higher than they could have been charging.