Colonial First State Investment Limited (CFSIL) has made a $56.3 million settlement with a Maurice Blackburn Lawyers class action, but still denies the allegations and makes no admissions of wrongdoing.
The class action was filed by Maurice Blackburn Lawyers in October 2019 on behalf of 100,000 super fund members, alleging delays in transferring members to MySuper products had left members paying higher fees, lower investment returns and also saw them bear the brunt of commissions to financial planners.
In a statement, CFSIL said: “Following a confidential, court ordered, mediation on 24 March 2022, CFSIL and the Applicant have agreed to settle the class action. The settlement is subject to court approval.
“In agreeing to resolve the litigation, CFSIL continues to deny the allegations and makes no admissions of liability or wrongdoing.
“CFSIL expects that a notification of the in principle settlement will be sent to eligible group members in April 2022. As the matter remains before the court, CFSIL is not in a position to provide further comment at this time”.
The lead applicant of the class action was a street sweeper driver named Lesley Coatman who retired with less than $35,000 in superannuation.
The case alleged CFSIL failed to act in the best interests of superannuation members by not transitioning $3.2 billion of accrued default amounts (ADAs) over to the lower-cost and better performing MySuper product.
The class action related to the transfer of certain default balances held by some members of FirstChoice Employer Super to a MySuper product in 2016 and 2017.
“If the court approves the settlement, eligible group members will each recover a share of the agreed settlement sum of $56.3 million, less an amount for the costs incurred by the Applicant and the Applicant’s lawyers,” CFSIL said.
Maurice Blackburn principal lawyer, Miranda Nagy, said: "MySuper was introduced to protect the retirement outcomes of Australians by ensuring that consumers weren't losing money on unnecessary fees and products, and 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”.