QSuper hit with class action over life insurance fees

The super fund of choice for thousands of Queensland public servants, teachers and doctors has been hit with legal action over the way it sold life insurance.

QSuper is merging with fellow Queensland super fund SunSuper. Picture: NCA NewsWire / Jono Searle

The super fund of choice for thousands of Queensland public servants, teachers and doctors has been hit with a class action over the way it sold life insurance.

Shine Lawyers have lobbed a class action against QSuper on behalf of fund members alleging they were overcharged for life insurance policies.

The case comes after the Federal Court affirmed a ruling by the Australian Financial Complaints Authority which found QSuper had failed to properly inform and charge a member.

QSuper is accused of breaching its obligations to notify members of changes to insurance premiums in 2016.

The fund, which covers most Queensland public servants, moved to introduce occupational ratings on life insurance offered to members in 2016.

The changes would see professional employees charged less than “blue collar workers”.

Professional employees were supposed to be charged 60-70 per cent the premium of blue collar workers.

The Australian Financial Complaints Authority found QSuper failed to charge a medical doctor Tommy Lam correctly, with the super fund classifying him as a blue collar worker and refusing to refund his premiums.

In its application to the Federal Court, Shine Lawyers alleges the notice sent by QSuper to its members did not give them information “that was reasonably necessary for them to understand the Insurance Change, because it did not identify to those members that it was necessary to make an election to be entitled to Occupational Rates and any reduced insurance premiums”.

Shine Lawyers class actions practice leader Joshua Aylward said QSuper’s moves saw 140,000 members slugged higher fees and suffer financial loss.

“QSuper changed their life insurance policy on 1 July 2016 and failed to adequately notify its members of how to get cheaper premiums,” he said.

“Significantly, most of the fund members impacted are Queensland Government employees and their spouses, teachers and health industry workers like doctors and psychiatrists.”

Shine is calling for QSuper to compensate members “for the damage suffered by them” or alternatively pay members “equal to the excess insurance premiums deducted from their accounts by reason of them not having been subject to Occupational Rates”.

“It’s incredibly disappointing that essential workers serving our community at all hours are those taken advantage of by this super fund,” Mr Aylward said.

A QSuper spokesman said the fund had “no comment on a matter before the courts”.

QSuper recently won approval in the Queensland Supreme Court to charge its members a special fee to pay fines and penalties.

This comes in the wake of moves by the Federal government to block super funds dipping into member funds to pay for penalties.

QSuper is currently in the process of merging with fellow Queensland super fund SunSuper.

Originally published as QSuper hit with class action over life insurance fees