Class action to seek $1bn for victims of retail super funds

Law firm Slater & Gordon is preparing class actions against superannuation funds owned by the major banks and AMP.

Law firm Slater & Gordon is preparing a series of class actions against superannuation funds owned by the major banks and AMP, alleging customers are owed more than $1 billion because of excessive fees and payment of below-market interest rates on cash holdings.

The law firm alleges that millions of super fund members could be eligible to join the actions, with Commonwealth Bank and AMP the first targets in a claim worth more than $500 million.

Head of class actions Ben Hardwick said the royal commission had revealed that some AMP super customers were getting negative returns on their cash investment option.

“We don’t believe there is any justification for a bank-owned fund member being worse off than industry fund members, especially when they have chosen to invest in a passive cash investment option which requires the fund to do basically nothing,” Mr Hardwick said.

“We think retail fund members should be compensated for the difference between their returns on cash, and the returns they should have received if the trustee had done their job properly.”

CBA said yesterday it was aware of the law firm’s announcement but had yet to be served with any legal proceedings. The bank said it would keep investors informed of any developments, but was committed to acting in the best interests of members.

An AMP spokeswoman also said the company had not been served with legal documents.

“We understand the proposed Slater & Gordon class action may be related to issues in our superannuation business that we previously identified and reported to the regulator,” she said. “As we set out in our submissions to the royal commission, we are already fixing these issues and remediating customers.”

Typically, class action law firms try to attract as many claimants as possible before launching a formal legal case to maximise the size of any settlement or court ruling.

Slater & Gordon said up to one-third of all adult Australians could be eligible to claim.

Mr Hardwick described CBA’s returns for some investors as “ludicrously low”.