11,000 QSuper members reach $67m settlement in class action over life insurance premiums

One of Australia’s largest super funds has reached a jaw-dropping settlement with more than 11,000 members who claimed they’d been overcharged for their insurance premiums.

The matter has been before the court since 2021. Picture: NewsWire/ Glenn Campbell

Super fund members who claimed they were overcharged for life insurance premiums by national super fund provider, QSuper, have reached a $67 million out-of-court settlement.

More than 11,000 members registered for the class action, lodged in November 2021, initially claiming to be owed hundreds of millions of dollars.

QSuper refuted the claims and, under the proposed settlement will not admit liability for them.

The case, brought by Shine Lawyers, alleged QSuper breached its obligations by failing to properly inform members of changes to life insurance premiums introduced in 2016.

QSuper is Queensland’s largest superannuation fund and is part of industry giant Australian Retirement Trust. Its members are largely made up of public servants.

The QSuper life insurance policy changes relate to occupational rates and members’ entitlements to elect standard rates, white collar rates, and professional rates.

Shine alleged they were charged significantly more for their life insurance than they should have been and suffered superannuation investment losses.

Shine Lawyers joint head of class actions, Craig Allsopp, welcomed the settlement.

“This brings long-awaited relief to affected fund members, the vast majority of which were Queensland Government employees and their spouses, including teachers, doctors, and other essential workers, many of whom were charged higher premiums despite having lower occupational risk,” he said.

QSuper members were mostly public servants and their families. Picture: NewsWire / Jono Searle

A spokesman for Australian Retirement Trust confirmed it has agreed to settle the action “that was based on the introduction of occupational ratings for insurance purposes for QSuper members on 1 July 2016, prior to the QSuper merger with Sunsuper to form Australian Retirement Trust”.

The spokesman said the decisin to settle was made “to avoid the risk of costs associated with ongoing litigation”.

“In agreeing to the settlement, the QSuper Board has made no admission of liability or wrongdoing,” he said.

“The in-principle settlement amount is $67m which includes legal costs and disbursements, and other fees and costs associated with the class action.

“No funds to settle the class action will come out of member accounts. The settlement amount will come out of money that had already been set aside by QSuper to provide for the potential liability from the class action, which was put into a reserve at the time of the merger to form Australian Retirement Trust.”

“If the in-principle settlement is approved by the Court, the process for distributing the settlement amount to eligible group members will be determined and approved by the Court and information will be provided to those eligible group members through Court-approved notices.”

Global litigation financier Woodsford funded the upfront costs of the case, which director Alex Hickson said proved the important role played by litigation funders.

“We are delighted that we could assist past and current fund members of QSuper to achieve redress through this class action, by allowing the case to be run with no upfront costs to class members,” he said.

“It is another example of the role that litigation funders like Woodsford play in promoting access to justice and Woodsford was proud to support this important case.”

Originally published as 11,000 QSuper members reach $67m settlement in class action over life insurance premiums